If General Electric Company (NYSE: GE) is 'the mutual fund in one company,' then The Procter & Gamble Company (NYSE: PG) is the 'consumer products aisle' in one company. Pick a brand, any brand. PG has about 300, including names you know well: Crest toothpaste, Folgers coffee, Bounty paper towels, Tide detergent, Gillette shavers - - PG's core product line contains brands that are entrenched in U.S. culture... and entrenched in U.S. consumer buying patterns.
Procter & Gamble says its mission is "to provide superior quality and value to the world's consumers," and both revenue and consumer satisfaction surveys suggest it is 'on message,' to borrow a political campaign strategy phrase.
To be sure, in the kaleidoscopic consumer products market, one can always find a designer/niche product - - a salon-based shampoo, for example - - that argues that it's better, for a price, than PG's product, but PG has moved forward on the premise that their products will offer more than adequate value for the typical person, globally. Smart premise. Profitable premise, too.
The Reuters FY 2008/FY 2009 revenue and EPS consensus estimates for PG are $81.6 billion to $86.4 billion and $3.49 to $3.90.
The risks? A sustained global economic slowdown would (obviously) hurt PG's results. Analysts are also keeping an eye on the encroachment of generic and store-brand products into PG's market share by product line.
The First Call mean rating for PG is: Buy [17 firms]. Mean 2008 target: $78 [high: $90, low: $71].
Stock Analysis: Procter & Gamble is a low-risk stock. Investors with an investment horizon longer than 1 year should be rewarded from PG's shares. Sell/Stop Loss if you were to purchase shares in this company: $56.
Disclosure: Lazzaro has no positions in stocks. In addition to private real estate holdings, he owns corporate and municipal bonds, and cash certificates of deposit.
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