Procter & Gamble
Another prototypical consumer stock is Procter & Gamble (PG). The $182 billion is one of the world's biggest manufacturers of consumer products. Brands include everything from Tide detergent to Charmin toilet paper and Cover Girl cosmetics. All told, the firm owns 25 brands that each generate at least $1 billion in annual sales, an impressive feat.
With a big footprint, Procter is working hard to trim down its silhouette. The firm plans on cutting $10 billion in costs over the next few years, a move that would materially impact its margins and cash generation ability. Cash is one thing that Procter & Gamble is able to generate in spades: last year, the firm earned $13.3 billion in cold hard cash from its operations, leaving it with ample dry powder to return to shareholders via its 3.37% dividend yield.Oversized international exposure has been a drag on earnings for PG. Because the firm makes 60% of its sales overseas and then has to convert its performance into dollars for financial reporting, the strength of the greenback in the last few years has been a big negative. Still, I think that the strong dollar is more a medium-term anomaly than a new normal. PG's international exposure should provide a tailwind down the road. Early-filing hedge funds picked up 3.84 million shares of PG in the second quarter, ramping up their exposure to the blue chip by almost 25%. I also featured Procter & Gamble, another of Warren Buffett's holdings, in "5 Rocket Stocks Worth Buying This Week."
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV