Procter & Gamble Co. (NYSE: PG) posted a slim share price gain of 0.1% last week, not enough to shake off the company’s ranking as the worst performing Dow Jones industrial stock of this year. So far in 2018, the shares have lost 20.1%. This is P&G’s fifth consecutive week as the Dow’s worst stock for the year.
The second-worst Dow stock so far this year is 3M Co. (NYSE: MMM), which is down 15.5%. That is followed by Walmart Inc. (NYSE: WMT), down 15.3%, General Electric Co. (NYSE: GE), down 14.2%, and Johnson & Johnson (NYSE: JNJ), down 11.1%. Dow losers outnumber winners for the year to date by a score of 18 to 12.
The Dow dropped 116.08 points over the course of the past week to close at 24,715.09, down about 0.4% for the week. For the year to date, the consumer staples sector was down 13.7%, the worst performing among the 10 market sectors.
P&G’s share price hit a weekly low early Tuesday morning, tracking the Dow’s movement almost exactly. Then it bounced about twice as high, before dropping sharply again on Friday.
There are few tailwinds in the consumer staples sector. Its — and P&G’s — saving grace is its massive cash flow, according to a report Saturday morning in Barron’s. P&G pays a dividend yield of almost 4% at Friday’s closing price, and the company has boosted its payout every year for 62 consecutive years.
It’s that dividend that makes stocks like P&G stand out, and a patient investor is also likely to see share price growth that could boost the total return on some consumer staples stocks to as much as 10%. P&G’s $4 billion acquisition of Merck KGaA’s consumer-health unit is intended to raise the firm’s cash flow and boost margins, but not this year and maybe not by much next year.
But as CFRA analyst Keith Snyder told Barron’s: “I don’t mind sitting on a 4% dividend yield waiting for [top-line growth] to happen.”
Procter & Gamble stock closed at $73.45 on Friday, down about 0.7% for the day, in a 52-week trading range of $70.73 to $94.67. The 12-month consensus price target on the stock is $81.79, unchanged from the prior week, and the forward price-earnings ratio is 16.43.