Investors have been left frustrated in these unstable times trying to find the best balance possible of security and growth. Obviously, bonds, savings accounts, and/or certificates of deposits don’t look like a nice options when we see that they give us a negative real rate of return. Commodities continue to be excessively volatile as well. However, investing in diversified companies, such as these three below, should provide returns that outperform the market in the long-run.
Is The Procter & Gamble Company (NYSE:PG) a buy?
Consumer products giant Procter & Gamble has been around since 1837. Since that time it has grown into one of the world’s largest corporations, with annual revenues well in excess of $83 billion and a market capitalization over $200 billion. The company is sitting at a new high, but still looks like a fair price to pick up some shares, as I describe below.
The company has done really well operationally, exceeding consensus analysts’ estimates in each of the last four quarters. Moreover, those analysts expect a healthy 8% per annum growth over the next five years. When we factor in their great return on equity in excess of 17.5% and operating margins at approximately 20%, The Procter & Gamble Company (NYSE:PG) looks enticing. Add in its consistently growing 3% dividend yield and world-class brand name, and that for me makes it a buy even at these levels.
Is there any juice left in Johnson & Johnson (NYSE:JNJ)?
Healthcare giant Johnson & Johnson is a well-respected company with very well-known products such as Listerine, Band-Aids, Neosporin, and of course its name-sake products. The company is simply a juggernaut, with over $62 billion in annual revenue and a market capitalization exceeding $210 billion. In addition, the company is sitting at a new high. That leads us to ask if Johnson & Johnson (NYSE:JNJ) is still worthy of a buy?
I believe this rock solid company is a good buy for a long-term, income oriented investor. This Dow component has exceeded consensus analysts’ estimates in each of the last four quarters. Moreover, the company trades at a relatively cheap 13.5x forward P/E. Having returns on equity over 17% and operating margins at 26% are definitely tempting. Add in perhaps most importantly its consistently growing 3.2% dividend, and that makes me a buyer.
Are there gains still to be made with General Electric Company (NYSE:GE)?
Massive conglomerate General Electric has its presence in everything from making water generators to financing products to building medical diagnostic equipment. The stock is sitting at a new 52-week high, and despite that run it still looks cheap.