One of the nonquantitative methods I use to pick stocks is to follow the amount of attention a company is receiving from reliable sources in the press. It has always been a good source of stocks that trend up in price.
Proctor & Gamble (NYSE: PG) is the winner this month. It has been mentioned as a top pick in at least five major articles in Barron’s and The Wall Street Journal in just the past few weeks, and it is an ideal hold for any retired or about to retire investor.
In the most recent article, “What the Smart Money is Buying,” in last week’s Barron’s, William Ackman of Pershing Square called it one of the greatest companies in the world.
Ackman spoke at the 18th annual Sohn conference in New York, and predicted PG would boost profits to the $6 area by 2016 from its current $4 estimate for this year. That would drive the share price to $120 from today’s price of around $80.
If you add its 3% dividend to the share price increase, you end up with about 18% annually.
Here’s a company that has increased its dividend every year for 57 years, has paid a dividend since 1891 – they even paid it during the crash years of 2008 and 2009 – and is a major player in one of the most stable sectors in the market.
While PG doesn’t fit the exact essential nature I like for stocks for retired portfolios, few if any of us will do without the soap, deodorant, toothpaste or diapers it makes. Its products are as essential as you can get outside of food, water, housing and energy.
Picking a well-known, big-cap name like PG is not brain surgery, but the attention this one is getting now from so many different sources is a solid indication of more good things to come.
This is a multiyear, dividend and growth play. Don’t expect instant results. They have some cost cutting and manufacturing efficiency issues to address. But, between here and there, PG will pay well and allow you to sleep at night, too.
That’s it.
P.S. If you’re looking for more aggressive income opportunities than Proctor & Gamble, I recommend you check out Marc Lichtenfeld’s new Oxford Income Letter. Each month he reveals stocks yielding as high as 15%. In fact, he just discovered the single biggest income opportunity of 2013… and it’s all thanks to a huge blunder by the Obama administration.
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