Procter & Gamble
01/22/2014 6:00 am EST
For more conservative income investors, dividend reinvestment plan expert and editor of DRIP Investor, Chuck Carlson, looks to a leading consumer products firm.
Procter & Gamble (PG) has appeal. I like the stock's yield of nearly 3%, and I also like the company's dividend-growth prospects.
Investors are, no doubt, drawn to stability that comes with owning an industry leader such as PG. To be sure, PG has had some trouble growing in recent years. The size of the company is one factor inhibiting growth.
It would not be surprising to see PG shrink-to-grow over the next few years. I think 2014 will bring some product-line rationalization at the company, with the firm likely to shed some lower-margin businesses to focus on higher growth areas.
The stock offers a reasonable safe haven for investors should markets turn volatile in 2014. My take on Procter & Gamble stock is that, while it is rarely going to be leading the pack, especially during rip-roaring bull markets, the stock represents the type of easy hold that works well in a DRIP.
The stock typically provides decent capital gains, and the yield and dividend growth prospects provide a nice kicker. I have owned Procter & Gamble stock for many years and continue to view it as a core position in my portfolio.
Please note that Procter & Gamble offers a direct purchase plan, whereby any investor may buy the first share, and every share of stock, directly from the company.