Procter & Gamble
Despite a solid rally this year, shares are trading at almost same level they were in January of 2015, in part because it has a very large 65% of sales directed to foreign customers. Procter & Gamble Co. (NYSE: PG) is a solid consumer staples stock for conservative investors to consider.
The company sells lots of very well-known household items that are essential for everyday life, and it operates through five segments: Beauty, Hair and Personal Care; Grooming; Health Care; Fabric Care and Home Care; and Baby, Feminine and Family Care.
The company posted solid earnings last quarter, and many on Wall Street feel that the new focus on a slimmed down product portfolio will help spur earnings growth and return the company to its long-time premium consumer staples multiple. Some analyst estimates for the next two years are 2% above current Wall Street expectations.
Procter & Gamble actually is innovative in its product development process and uses that to help ensure future growth and cash flow. This should provide investors years of steady growth and dividends. While currency headwinds have weighed on earnings and projections, the weaker dollar scenario should bode well for the future.
Shareholders are paid a 3% dividend. The Merrill Lynch price objective is $95, and the consensus target price is $90, which is right where shares closed last Friday.
This top industrial could really jump with an economic pickup. 3M Co. (NYSE: MMM) is a diversified, global manufacturer. Its businesses are technology-driven and organized under five segments: Consumer, Safety and Graphics, Electronics and Energy, Healthcare, and Industrial. Its popular brands include Scotch, Post-It, 3M and Thinsulate. The company also holds over 500 U.S. patents.
3M posted outstanding second-quarter results, and the company adjusted the midpoint of its guidance, the analysts remain positive but note the company, like many, faces a tough global macro environment. They do think the results are strong in relation to peers and feel that the focus toward return on invested capital will yield multiple expansion and earnings growth.
3M investors receive a decent 2.6% dividend. The Merrill Lynch price target is set at $200. The consensus target is at $182.57. Shares closed Friday at $175.06.
Nothing real exciting here, just companies that have been around forever and regardless of politics, macro changes and headlines will be around for the foreseeable future. These stocks are perfect fits for conservative growth and income portfolios, and they may fare even better in 2017 with a weaker dollar.