Procter & Gamble (NYSE:PG) is a classic dividend stock for the portfolio. However, investors might be cautious on fresh exposure to PG stock after a rally of 31.8% in the last year. I am of the opinion that valuations still remain at sane levels and PG stock is worth considering.
I also believe that as the probability of a global recession in the next 12-18 months increases, there will be a flow of funds into relatively defensive stocks like Procter & Gamble. The stock has a beta of 0.4 and sells products that are more of necessity than luxury. The company’s CFO, Jon Moeller, does acknowledge that consumers can possibly shift to cheaper products during a recession. However, the company plans to counter that risk by focusing on “creating a superior product worth the investment.” Therefore, valuation is not a concern and Procter & Gamble is likely to remain relatively insulated from an economic downturn.
Source: InvestorPlace
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