The Procter & Gamble Company (NYSE:PG) had a good quarter. Heck, the firm has had two good quarters. And the market just seemed to realize it following the company's most recent earnings statement. That's good, and the way the company's stock jumped after the earnings shows that people can see a good thing. But that's the problem with only looking backward, you're only getting some of the profit.
That can be the case with a lot of household consumer stocks. Investors - and consumers - are so used to seeing them, and buying them, that they become a part of the air and water. They don't exist as investments because they're everywhere.
Household stocks are a part of what I used to tell my brokerage clients are the 'boring investment group.' Everyone wants to hear about the things they see on the news. The technology, energy and transportation sectors all command a lot more media attention than household goods. When's the last time you saw CNN do 3 minutes on toothpaste? Not recently, I'd wager. That's exactly why they're good investments. They do their thing, make money and just grow in value as everyone in the world buys the products they sell. As one of my investment mentors way back when said, “Even in the worst recession … people still brush their teeth.”
So think about these consumer stocks. They should treat you well going forward.
The Procter & Gamble Company (NYSE:PG)
If you're not already in PG, you're going to be a little behind the curve. The firm has reported two good quarters and expanded into overseas markets. But there's still value there if you move quickly. The company still has some expected value growth with a P/E above 18, but my guess is that won't last. Even an EPS of 3.80 won't deter investors now that the herd instinct is kicking in. Get some soon and wait for six months to see if the firm's plan continues to pay off. Remember, even before the latest earnings rampage, this is still a firm that appreciated 15%+ in six months.
Colgate-Palmolive Company (NYSE:CL)
Just because CL has a market cap one-quarter of PG doesn't make it small. It's still sitting on a valuation of $52 billion. Another excellent household goods stock, Credit Suisse has set a target on it of $126. Given that it's at $110, that's not a bad call on their part. Stock-wise, CL has had a great year. Twelve months ago it was almost $20 dollars lower. Another great growth year for a solid, well-managed firm. It also pays a 2.25% dividend to help you make up your mind. Another one to add to your portfolio, then think about every time you're brushing your teeth. Smile as you cash those checks.