International Business Machines Corp. (IBM), The Procter & Gamble Company (PG): How to Find a Stock That Will Last a Century

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Former CEO Lou Gerstner logged long hours with customers and reinvented International Business Machines Corp. (NYSE:IBM)as a company that could understand its customer’s I.T. needs. By 2000, International Business Machines Corp. (NYSE:IBM) Global Services was the largest I.T. consulting service in the world and accounted for 30% of revenues, Today, consulting accounts for 40% of the company’s $105 billion in sales.

This type of evolution is a feat International Business Machines Corp. (NYSE:IBM) has pulled off several times in its history.

The Procter & Gamble Company (NYSE:PG) is known for its ability to innovate. However, what’s less well known is its ability to cut struggling segments.

In the past decade, the company sold off its Jif, Crisco, and Folgers to The J.M. Smucker Company (NYSE:SJM) and pawned off its $2.7 billion Pringles brand to Kellogg Company (NYSE:K).

The move was essential because it freed up capital and resources to innovate its core personal care and household brands as well as enter new businesses helping the company outpace its rivals.

Foolish bottom line

As long-term investors our goal isn’t to try to predict the future but to find management teams and organizations most capable of navigating that change.

Only companies that can shed old businesses and reinvent themselves will survive. That’s exactly what IBM and The Procter & Gamble Company (NYSE:PG) have done several times in their histories.

The article How to Find a Stock That Will Last a Century originally appeared on and is written by Robert Baillieul.

Robert Baillieul has no position in any stocks mentioned. The Motley Fool recommends Procter & Gamble. The Motley Fool owns shares of International Business Machines (NYSE:IBM).. Robert is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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