The Procter & Gamble Company (PG)

Like one of my other picks -- Clorox -- this one is a long-term keeper. Its portfolio of brands is stunning and does a lot of volume every year. This stock is a core investment, to be sure; dollar-cost average it, and plow all dividend payouts back in. It has great cash-flow characteristics behind it, the company knows how to develop household products and foodstuffs that resonate with consumers, and it is a reliable Dow component. Check it out.

PG will lead the way out of the recession, but once we're in bull market territory they will remain stagnant - a favorite income investor play. But for the next 18 months or so - PG will continue to provide the products that even broke consumers need, which results in refreshing profit in a downtrodden time.

Buy world-class consumer goods companies, reinvest the dividends, and then wait 30 years. Sounds boring, but that's a simplified version of Jeremy Siegel's advice for long-term wealth. PG is among the best of the best, and will anchor my portfolio for decades.

You know you've got a strong company when even big mergers go according to plan. The Gillette purchase was everything it was claimed to be. Strong, strong earnings for the next couple of years.

Just like with JNJ - purchasing at the beginning of the troubles would have been good. Purchasing now will lead to under performance of the market in the uptick. This one's too stable to be a market beater.

Will provide market or better returns with their solid product line and brand name loyalty.

I'm no great consumer, but I can't help but notice the number of products in my home that are made by PG. Almost by default when shopping for essentials theres something in the shopping basket by PG.

P&G has a steady track record of growth and dividend payment. This is an experienced company with a wide range of products and an international reach. Product loyalty and diversification of markets should protect them from the consequences of inevitable economic downturns.

From a basic standpoint, the market is in a slight downturn right now, and I'm not expecting a huge upturn until the housing mess gets sorted out. They're historical beta is nice and low, they pay a reasonable dividen, there is a steady need for their products, and they're quite profitable. I'll say OK to them.

PG is a well established, conservatively managed global company with deep market penetration in the consumer products segment. PG has been able to sustain its dividend during both bull and bear markets. It has a low beta which buffers it against excessive market volatility. The stock will outperform, relative to peers and the broader market (DIA, SPY), in both bear market and sideways markets. It will tend to lag in fast paced bull markets. During "normal" bull market periods, PG tends to track market performance (~7% growth per annum) with quarterly dividend payments giving the stock a slight outperformance advantage versus the broader market (DIA).

Fundamentals have always been good for this company in terms of cash flow, debt and return. Leader in CPG companies giving consistent performance and have been beaten down for bad transition with Gillette. Expect the synergies and earnings to start compounding from the purchase over the next couple of years: dividends will grow along with the steady stock growth.

Just about everybody in America uses P&G products, and they're always coming up with new and inventive ways to use them. Just last week, I came across Tide sink packets. Little single-serving envelopes of liquid Tide, ideal for business travelers like me. This was exactly what I never knew I'd always wanted. That kind of continued ingenuity and customer focus has to be a good thing.

The Best Blue Chip for 2007: Procter & Gamble

By Todd Wenning (TMF Phila)
November 9, 2006

Did you shower today? Brush your teeth? Use deodorant? Even if you did just one of these things -- and hopefully you did all three -- there's a good chance you used a product made by Procter & Gamble (NYSE: PG). From its humble beginnings in 1837 as a soap-making company in Cincinnati, P&G has grown into a $200 billion international behemoth and a true American success story.

P&G stock has rewarded its investors over the long run, as well. According to Professor Jeremy Siegel's book, The Future for Investors, P&G returned 14.26% per year from 1957 to 2003, turning a $10,000 investment in 1957 into more than $4 million 46 years later. Moreover, in 2006, P&G marked 50 consecutive years of dividend increases for its shareholders, with a goal of increasing its dividends 10% per year going forward.

That sounds pretty good to me. The dividend growth target particularly demonstrates management's confidence in generating superior returns for shareholders.

Running out of gas?
It's no secret that P&G has been a great blue chip in the past, but the real question on P&G investors' minds has to be: "Will the stock continue to outperform the market?" I answer that question with a resounding yes. Here's why.

Success in international markets will have a profound effect on blue-chip growth in the coming decades. With the American economy growing at a slow but steady pace, U.S. megacap companies with a large domestic presence need to look overseas for greater growth opportunities. Those that don't will surely be left behind.

As the global economy grows stronger, American multinational companies with solid international growth strategies, such as Starbucks (Nasdaq: SBUX), McDonald's (NYSE: MCD), and Nike (NYSE: NKE), stand to profit nicely. Not only do successful international operations fuel growth, they also diversify corporate assets and hedge against a possible depreciation of the U.S. dollar.

P&G has positioned itself well in the international market, with operations in about 80 countries and its wares available in more than 140 countries. In the past year, P&G generated 56% of its revenues outside the United States -- totaling nearly $39 billion. To put that number in some perspective, that's more than the national GDPs of Cambodia or Kenya. Perhaps more importantly, P&G's international revenues have been growing steadily, and they show no signs of slowing down anytime soon.

Please do not feed the bears
Of the 619 investors who have rated Procter & Gamble in our Motley Fool CAPS investing community, 598 -- a whopping 96.6% -- believe P&G will continue to outperform the S&P 500. Perhaps contributing to this overwhelming bullish sentiment are followers of the Oracle of Omaha. Indeed, Warren Buffett has a 100-million-share position in the company, but with P&G's international operations set up for superior growth, it's hard to be a bear in this neck of the woods.

Whether or not you agree with my assessment of P&G, take a second to vote "outperform" or "underperform" for the stock on Motley Fool CAPS. We'd love to hear your take.

To read about the rest of our blue-chip candidates, click here.

Todd Wenning has rated Procter & Gamble "outperform" on Motley Fool CAPS. He owns shares of Starbucks, a Motley Fool Stock Advisor pick. The Fool's disclosure policy is too legit to quit.

This is my CAPS holding in groceries as a hedge against a downturn in the technologies... and I'll be picking it up in my cash portfolio too, for the same reason.

P&G is not about luxury goods but about daily staples. If it turns out the economy is headed into recession, it will hold up because people still need to eat and wash. If the economy keeps going strong, same story. And it also delivers solid, regular dividends.

PG is a boring company that produces a ton of essential consumer products. Procter & Gamble is going to be around for a long time, making the stuff that consumers buy no matter what the economic situation looks like (unless, of course, we all collectively decide to stop brushing our teeth, washing our hair, shaving, putting diapers on our babies, feeding our dogs, or—most unlikely of all—eating Pringles). A great, stable long-term value buy.

PG is creating new products every year.New markets inChina, Asia and Brasil. It has become and international consumers company.Even in depress economy you need to use soap, clean your house and take care of your family and you with PG products. You needs to buy those products again and again and again.

fantastic company, nice dividend, and top brands. Gillete acquisition provides all those batteries for their new cleaning accessories. Also acquired some new research with Gillete re: hair removal. Looking forward to the upswing longterm.

New products will continue to increase sales volume and profit margins

Great Brands, Good Growth Year in and year out, Good Dividend, and undervalued, I'll buy this and hold until the baby boomers have all sunk their money into this to get a safe company and the dividend, and in 5yrs I will be rewarded for my patience.