SWAN, an acronym for “Sleep Well At Night,” epitomizes the quintessential “set-it-and-forget-it” investment strategy—stocks that are so reliable, you could hold onto them indefinitely.
In this article, I’m thrilled to spotlight my paramount SWAN stock: The Procter & Gamble Company ($PG).
Investing in Timeless Essentials Procter & Gamble is at the helm of the consumer staples sector, crafting indispensable items such as toilet paper and soap—products that stand resilient against market disruptions.
The company’s legacy includes the enduring Ivory soap, a staple since 1879, and Tide laundry detergent, a household name since 1941.
While the future of technology and energy sectors may be uncertain, one can confidently expect that the daily rituals of brushing teeth and washing hands will persist.
This predictability positions Procter & Gamble as a steadfast investment for the foreseeable future.
Dividends and Performance: A Legacy of Growth Procter & Gamble boasts a remarkable track record, having augmented their dividend annually for an impressive 68 years—a testament to stability that predates even my parents’ generation.
The company’s initial dividend yield stands at approximately 2.60%, significantly surpassing the S&P 500’s 1.35%. This is particularly advantageous for long-term investors who prefer to generate income through dividends rather than liquidating stocks.
Moreover, Procter & Gamble’s dividend growth consistently eclipses long-term inflation rates, with a recent increase of 7% and a five-year compound annual growth rate of 5.58%.
While Procter & Gamble’s long-term performance may not match the S&P 500’s, this is not inherently disadvantageous.
Procter & Gamble has realized a 10-year average annual total return of 9.90%, in contrast to the S&P 500’s 12.91%. However, it’s crucial to recognize that tech giants like Apple and Microsoft comprise nearly 14% of the S&P 500 index fund.
Purchasing a fund such as Vanguard’s S&P 500 ETF essentially means investing heavily in a select few tech companies, with the remainder of the index contributing minimally.
Given the potential volatility in the tech sector, Procter & Gamble offers a more stable, higher-yield alternative.
Conclusion: A Stalwart Investment Procter & Gamble stands as a formidable investment at its current valuation, and becomes even more attractive should its stock price fall below $150 per share.
With over 185 years of leadership in the consumer staples market and ownership of more than 22 billion-dollar brands, such as Bounty and Pantene, Procter & Gamble is akin to a diversified consumer staples ETF.
Given the perpetual demand for consumer staples, Procter & Gamble emerges as an excellent investment for generating sustainable dividend income.
Disclaimer: The content of this article is intended solely for entertainment. It does not constitute financial advice. Always conduct your own research before making investment decisions.