Procter & Gamble (PG) may be the classic example of a safe stock. But does it imply you should go out and purchase PG stock (NYSE:PG) right now?
PG stock (NYSE:PG) has several characteristics that make it probably the ideal investment for a bear market. Here’s everything you need to know right now and in the future.
A stock that can be used for practically anything.
You may not be familiar with the term Procter & Gamble; it is a corporation that works behind the scenes, selling several products under its names. For example, almost everyone is familiar with Old Spice deodorant. However, Procter & Gamble’s name may be seen on the back of the label. The same is true for 65 product brands across ten categories, ranging from fabric care to dental treatments.
These items add up to significant money for Procter & Gamble, which has nearly $80 billion in yearly sales globally. The company’s growth will not blow you away; revenue has increased by an average of 4% each year over the last five years. However, since its goods are household needs that consumers purchase regularly, Procter & Gamble has remained robust throughout the years. The firm is a Dividend King, having paid and increased its dividend for 66 years in a row, demonstrating its longevity.
Since the early 1990s, the company’s operating profit has not dropped more than 30% from its peak. Despite several recessions and market disasters, Procter & Gamble continues to thrive. Assume that the company experienced a huge speed bump this year, and cash earnings dropped by 50%. The firm has a 64% dividend payment ratio and $7.2 billion in cash on hand, which is adequate to fund the dividend without borrowing money.
You throw all of these hypothetical obstacles at Procter & Gamble, things with such a low probability of occurring, and the corporation has a response for them! Nothing in investing is certain, but Procter & Gamble’s dividend and lengthy track record of consistent growth make PG stock (NYSE:PG) one you can comfortably purchase and own for the long term.
But Should You Purchase PG Stock Right Away?
Overpaying for a company, especially if it’s a blue-chip stock like PG stock (NYSE:PG), maybe a one-way trip to dismal results. Procter & Gamble has completed its fiscal 2022 year with profits per share of $5.81, putting company at a price-to-earnings (P/E) ratio of 22. The stock’s (NYSE:PG) median P/E ratio for the last decade is 23, which is trading somewhat below long-term averages.
If the stock’s value remains stable, investors may expect strong returns; analysts anticipate EPS growth of roughly 6% per year over the next three to five years and a consistent dividend yielding around 3%. Returns in the high single digits aren’t terrific, but you’re paying for the security that Procter & Gamble gives to a portfolio.
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Author Okoro Chinedu 
