5 Best Stocks To Invest In For Financial Stability

4. The Procter & Gamble Company (NYSE:PG)

Number of Hedge Fund Holders: 74

The Procter & Gamble Company (NYSE:PG) is an American multinational corporation that operates through five segments – Beauty, Grooming, Health Care, Fabric & Home Care, and Baby, Feminine & Family Care. The FMCG giant has remained consistently profitable for decades and has raised its dividends for 66 years consecutively.

This past December, Deutsche Bank analyst Steve Powers raised the price target on The Procter & Gamble Company (NYSE:PG) to $162 from $156 and kept a Buy rating on the shares. Although the analyst stated that data points are “choppy,” he believes that there have been several positive developments for the markets over the past weeks, including lower-than-expected inflation in November, the Federal Reserve signaling a move to a more deliberate pace of hikes, and signs of progress away from China’s Zero COVID policy.

According to Insider Monkey’s data, 74 hedge funds were bullish on The Procter & Gamble Company (NYSE:PG) at the end of December 2022, compared to 69 funds in the prior quarter. Ray Dalio’s Bridgewater Associates is a prominent stakeholder of the company, with 4.99 million shares as of the fourth quarter.

Rowan Street Capital mentioned The Procter & Gamble Company (NYSE:PG) in its Q4 2022 investor letter. Here is what the firm has to say:

“Let’s look at The Procter & Gamble Company (NYSE:PG). Dividend yield is 2.4%. Earnings are forecasted to grow at 5.9%, and its current earnings multiple is at 25x. Now, lets say over the next 3-5 years the market loses interest in the “safe”, mature companies that grow at anemic rates and gets an appetite for growth again. It’s very unlikely that Mr. Market will be paying 25x for 5.9% earnings growth. Lets assume that multiple declines to the market average of 18x — that would be ~6.9% drag per year on the total expected return over next 3-5 years. If we get 2.4% (dividend) + 5.9% (earnings growth) – 6.9% (decrease in earnings multiple) = 1.4% (annual return we can expect on average from this stock).”