The company currently pays out a 1.7% dividend yield (management plans to increase the dividend by at least 12.0% per year). The stock’s 12.5 earnings multiple is reasonable when considering the potential earnings growth and dividend yield.
Safety in consumer goods
The Procter & Gamble Company (NYSE:PG) believes that it can grow its revenue while cutting back on costs. The growth in revenue will be driven by international expansion. The company owns a valuable portfolio of products that could have appeal in any market in the world. I mean it’s really hard to deny the practicality of having a tooth brush, toilet paper, and shaving cream, right? The company sells some of the most practical necessities and because of this The Procter & Gamble Company (NYSE:PG) is considered non-cyclical.
The company plans to double its earnings by cutting back costs by $10 billion between 2012 and 2016. If the company is successful at this, the stock could be heavily undervalued. The stock currently trades at a 19.4 earnings multiple, which is reasonable for a growth investment. The stock also compensated investors with a 3.1% dividend yield.
The bond market has been a very unforgiving place for an investor’s portfolio lately. This list was put together thinking strictly about capital preservation while hoping to accomplish growth at the same time. Pinnacle West Capital Corporation (NYSE:PNW), The Kroger Co. (NYSE:KR), and The Procter & Gamble Company (NYSE:PG) all have very effective economic moats, giving the average investor the greatest margin of safety that is available in the stock market. The stocks aren’t as safe as Uncle Sam, but they get close to it.
Alexander Cho has no position in any stocks mentioned. The Motley Fool recommends The Procter & Gamble Company (NYSE:PG).
The article Here Is How You Make a Buck off a Sell-Off originally appeared on Fool.com.
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