The span of long-term investment in the stock market varies according to the prevailing market conditions and the company’s strengths in consideration. There is no set definition of long-term and short-term in the stock market. While five years might seem appropriate as a long-term investment for some company stocks, for some other companies, it might be only one year for some other companies. According to the market watchers and analysts who predict the stock movements and price shortly based on their algorithms, Proctor and Gamble stock is an excellent long-term investment for one year. Currently, the company’s Zacks rank is No.3 based on the proprietary data, which points to an inline return from P&G shares in the next few months for the prevailing market conditions.
The outlook about Procter and Gamble stock
Founded in 1837, Procter and Gamble are American multinational consumer goods focused on global business in personal care, hygiene products, and home care products. The business segments consist of Beauty, Healthcare, Grooming, Feminine and Family Care, Baby, and Fabric and Home Care. The company’s stock is currently trading at $159.54 and was down by 4% during the first weeks of January 2022. Despite the slide, the stock is sitting on the high-end based on the 52-week range. What does this means to investors is something to consider?
The rule of thumb says that investors should listen to what the company is saying or hint at it to gather insights into how it is moving. You should remember that while reporting the Q1 earnings In October 2021, the company told investors that the earnings would likely be under pressure during the first half of its fiscal year, which commenced last quarter.
The company reported Q1 earnings of $1.61, which, despite a sequential increase of 42%, is a decline of 1% from the earnings of $1.63 per share recorded in 2020. Moreover, the Q1 earnings are 1% more than the analysts’ projections which were up by 8.6% in the prior year. However, the company reported a record-high revenue of $20.34 billion, and for the fiscal year that ended in June 2021, the company reported organic growth of 6%.
The company manages the expectations of slow growth, and its stock is trading at the upper end of the 52-week range.
Earnings to gather momentum
Although the company projected a sluggish start, it also mentioned that the forecast earnings are likely to gather momentum in the second half. However, investors are skeptical about how the impending higher interest will impact economic growth and consumer spending. However, the well-known defensive stock of Procter and Gamble can counter any downturn much more efficiently and effectively than other companies. Perhaps this aspect influenced the forecast by analyst Andria Faria Teixeira of JP Morgan. She assigned a Buy rating for the company’s stock with a target of Procter and Gamble stock price of $165.32, 10% higher than that of many other analysts.
Hold stock for income investors
One of Procter and Gamble’s is the company’s ability to pay dividends consistently and at incremental rates year on year. The company provides a steady income stream for its shareholders from dividends and belongs to the exclusive Dividend Kings club. The club includes companies that have increased dividends for 50 consecutive years, and P&G has achieved the rare feat of doing it for 65 years at a stretch.
They will pay the dividend on February 15, and January 20 is the ex-dividend date. Since the ex-dividend date is a day after earnings, it makes sense for investors who want to buy P&G stocks at a bargain to take a call after that date.
Those who already have Procter and Gamble stock would do good to hold on to it because there is no reason to sell now. Firstly, you will not get the kind of appreciation that the stockholders got in 2021. Moreover, for 2022, the company plans to pay more than $8 billion in dividends and an additional $7 billion to $9 billion through share repurchases.
