Basic Needs Portfolio Selection: The Procter & Gamble Company (PG)

It also signals a company that understands where its core products lie. Last year, P&G sold its Pringles snack brand to Kellogg Company (NYSE:K) for $2.7 billion, freeing up precious capital for P&G to advertising its core brands and research new products, while giving Kellogg Company (NYSE:K) a way to expand its product lineup beyond just the breakfast aisle.

Another selling point of P&G is its name-brand product line. There are few companies where you’ll find such recognizable and iconic American brands as you will with The Procter & Gamble Company (NYSE:PG). Let me give you a sample of what you get when you buy into P&G: Tide, Crest, Pampers, Gillette, Duracell, Febreze, Pantene, Oral-B, Head & Shoulders, Charmin, and Downy — just to name a few. Chances are very good you’ll find at least a handful of these names in most American households. Best of all, P&G is always researching to improve its product line, with its third-quarter results demonstrating strong sales for its new Tide Pods and reformulated Pantene shampoos.

And of course, how could any discussion of P&G be complete without discussing its consistent dividend growth? P&G has paid a dividend now for 123 straight years and holds the fifth-longest active streak for annual dividend increases among publicly traded companies at 56 years!

Source: Nasdaq.com.
*Assumes quarterly payout of $0.6015 for the remainder of 2013 and 2014.

Furthermore, it recently boosted its share buyback target up to $6 billion, which will help reduce shares outstanding and make the company appear cheaper on a P/E basis. Its current yield of 3% is close to 50% higher than the S&P 500‘s average yield and easily tops the yield on a U.S. 10-year Treasury note.

With A.G. Lafley back at the helm, many, including me, believe that The Procter & Gamble Company (NYSE:PG) will remain on track to deliver steady growth in U.S. and overseas markets. With brand power like this, I’m not sure how it could go wrong.

Stay tuned next week, when I’ll unveil the 10th and final selection in the Basic Needs Portfolio.

The article Basic Needs Portfolio Selection: Procter & Gamble originally appeared on Fool.com and is written by Sean Williams.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.