On the Agenda
- Procter & Gamble PG A prime Forever Stock with a 14.3% return last year, strong brand loyalty, an evergreen product range, and a 2.5% dividend yield emphasizing long-term investment.
- Pfizer PFE Faced a 40% YTD drop with revenue dip, yet boasts a solid financial foundation and FDA-approved 5-in-1 meningitis shot. Prioritizes safe, fast drug development with key acquisitions.
- Coca-Cola KO Despite an 11% YTD loss, it’s a dominant Forever Stock with increased revenue and net income growth, especially in Latin America.
Discerning investors constantly seek out so-called Forever Stocks. These are resilient blue-chip companies promising long-term investment potential. Known for weathering market downturns with grace, many of these stocks are also market leaders, boasting robust business models. Some might be tech giants shaping our digital future. Others could be renewable energy pioneers leading the sustainable revolution. There are also consumer staples, proving their worth decade after decade.
A healthy price-to-earnings ratio often characterizes these stocks. Additionally, they offer steady dividend yields and impressive compound annual growth rates (CAGR). For many investors, these metrics signify opportunities for capital appreciation. Furthermore, these stocks can become passive income sources for those aligned with the buy-and-hold strategy.
In this article, we’ll dive into both value and growth investing realms. Our focus will be on three stocks, each with a wide moat in its industry.
Procter & Gamble Co. (PG)
When talking about Forever Stocks, Procter & Gamble easily comes to mind. As an industry leader with durable business models, it boasts a legacy of consistent profitability. In the past year, it delivered a commendable return of 14.3%, showcasing its resilience even during market downturns. In the latest Q1 figures, there’s no denying its dominance — revenue rocketed by 6.1% to a whopping $21.87 billion, and net income soared with a standout 14.8% jump to $4.52 billion. On top of that, its stash of cash and short-term investments ballooned by a stellar 45.1% to $9.73 billion.
P&G isn’t just about numbers, though. The company’s moat lies in its brand loyalty, a result of evergreen products and a competitive advantage built over decades. Long-term investors often flock to dividend-paying stocks like this blue-chip beauty. Offering a dividend yield of 2.5% and a payout ratio of 59.3% demonstrates how value investing can harness the power of compounding. Given its sustained growth and the intrinsic value it offers, Procter & Gamble stands out as a prime choice for those embracing the ”buy and hold” strategy (”it’s not about timing the market, but time in the market“). So, as headlines buzz about earnings calls and potential asset sales, one thing remains clear: Procter & Gamble’s consistency meets opportunity.
In a roller-coaster year, Pfizer navigated turbulent times with a 40% plunge in its year-to-date stats. The latest earnings painted a picture of a staggering 54% dive in revenue, landing at a cool $12.73 billion. Meanwhile, net income took a slide to a neat $2.33 billion. Notwithstanding, Pfizer’s financial foundation remains solid: cash and short-term investments rose by 34.4% to a $44.79 billion, and total assets climbed by 12.7% to $220.17 billion.
Pfizer has been making significant progress in product development and innovation. The recent nod from the FDA for its groundbreaking 5-in-1 meningitis shot pushes the company a notch higher, beating competitors like GSK PLC GSK . Additionally, the company’s significant educational workshops and endeavors in quantitative systems pharmacology underscore its commitment to steering safer and faster drug development. The European Union’s green light on Pfizer’s massive $43 billion acquisition of Seagen further fortifies its standing in the global pharma landscape.
On the valuation front, Pfizer’s P/E ratio stands at a modest 8.19, making it potentially attractive to value-focused investors. Moreover, for income enthusiasts, the company offers a generous dividend yield of 5.34%, highlighting its commitment to returning value to its shareholders.
In the world of Forever Stocks, Pfizer’s recent developments position it as a contender. While the past financial performance might raise eyebrows, the company’s innovative strides and strategic acquisitions point to a potential rebound. As with all investments, it’s important to keep an eye on the big picture, and Pfizer’s recent milestones suggest it’s geared for the long run.
Coca-Cola, a benchmark Forever Stock, has encountered choppy waters this year, reflecting a year-to-date loss of around 11%. However, diving deeper, it’s evident the beverage giant still has the fizz. For starters, its recent financial disclosures reveal revenue growth of 5.7% year over year to $11.97 billion in June 2023. Alongside, a net income surge of 33.7% and a solid net profit margin of 21.3% hammer home its resiliency in challenging times.
In its Q3 2023 earnings report, Coca-Cola its exceptional market performance was buoyed by organic sales that exceeded expectations. Latin America’s dazzling 24% growth spike played a big part in this win, showcasing the brand’s strategic and regional strengths. And then there’s Coca-Cola’s plunge into the ready-to-sip alcohol scene, which not only signals adaptability but also its ability to stay synched with consumer preferences.
Other signs of Coca-Cola’s financial strength: Its declaration of a $0.46 dividend and reporting of a P/E ratio of 22.6. Against a backdrop of fluctuating interest rates and unpredictable market dynamics, the company’s steady 3.3% yield shines through. Such strong financial indicators, coupled with its agile market strategies, reaffirm Coca-Cola’s position as Forever Stock royalty.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Equities.com Guidelines.