We recently compiled a list of the 10 Best Diversified Dividend Stocks To Buy Now. In this article, we are going to take a look at where The Procter & Gamble Company (NYSE:PG) stands against the other diversified dividend stocks.
In this article, we will take a look at some of the best diversified dividend stocks.
Diversified stocks refer to companies involved in multiple sectors, industries, or regions. These businesses, often large conglomerates like Warren Buffett’s Berkshire Hathaway, generate income from a variety of operations. The main goal of diversification is to lower risk by spreading investments across various areas, reducing the potential negative impact of poor performance in any one stock or sector. Nathan Wallace, principal wealth manager at Savvy Advisors, also supported the idea of diversifying portfolio. Here are some comments from the analyst:
“Through intelligent portfolio building and diversifying, investors can create a portfolio of risky assets with an aggregate volatility that is lower than any of the individual securities. The key here is to buy securities with attractive risk profiles that are not correlated to each other in a significant way with the goal that when one asset is performing poorly, another asset will pick up the slack through positive performance.”
That said, diversification doesn’t guarantee a lack of correlation between your investments. For example, owning 100 tech stocks might reduce risk compared to holding just one, but those 100 stocks are likely to be correlated with each other. To truly minimize risk, it’s important to diversify beyond just one sector. According to analysts, the higher yields on Treasury bonds could provide some protection in the event of a major stock market decline. Despite this, those who believe in diversification are facing uncertainty. US stocks continue to outperform year after year, driven by the consistent profits of American companies, making other investments seem like a path to underperformance.
On the other hand, a recent study by Preqin revealed that institutions, including pensions, endowments, and foundations, hold $21 trillion in traditional diversified strategies, as of June 2024. These strategies allocate funds across various investments such as bonds, stocks, real estate, and cash.
The year 2024 proved to be exceptional for US stocks, with the broader market rising over 23%. The Nasdaq outperformed with a nearly 29% gain, while the Nasdaq 100 rose close to 25%. These impressive gains were largely driven by the Magnificent 7 stocks, which surged by nearly 67%, along with other mega-cap companies. This marked the second consecutive year that the broader market achieved gains exceeding 20%, a feat last seen in the late 1990s.
Regardless of market conditions, investors have consistently sought comfort in dividend stocks. Among these, dividend growth stocks have gained significant interest. A report from BlackRock revealed that, over time, stocks that consistently increased or maintained their dividends have tended to perform better than those that didn’t pay dividends or cut their payouts. In times of market decline, dividend-paying stocks often offer a safeguard against fluctuating share prices. Companies that pay dividends typically aim to sustain these payments and are usually hesitant to reduce them unless it’s essential.
When considering dividend stocks, investors typically assess the dividend yield. Experts suggest targeting yields between 3% and 6%, as yields higher than this could signal potential yield traps. Brian Bollinger, president of Simply Safe Dividends, has highlighted this advice. Below are some insights from the analyst:
“I generally like to advocate for an approach of targeting great businesses that might pay closer to a 3% to 4% dividend yield.”
Our Methodology:
For this list, we scanned Insider Monkey’s database of Q3 2024 and selected conglomerate firms that specialize in several different businesses and pay regular dividends to shareholders. The list is ranked in ascending order based on the number of hedge funds having stakes in the companies.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).
A happy couple viewing the products of this household and personal product company in a mass merchandiser store.
The Procter & Gamble Company (NYSE:PG)
Number of Hedge Fund Holders: 68
The Procter & Gamble Company (NYSE:PG) is an American multinational consumer goods company. It recently released its fiscal Q2 2025 earnings and reported revenue of $21.9 billion. The revenue showed a 2% YoY growth and also beat analysts’ estimates by over $291 million. The company’s organic sales, which exclude the effects of foreign exchange, divestitures, and acquisitions, grew by 3%. This growth occurred even after the company stopped raising prices, demonstrating its ability to achieve volume growth, which is considered more valuable than simply increasing revenue through price hikes. Organic volume increased by 2%, while prices remained unchanged. The baby, feminine, and family care segment performed particularly well, with both organic volume and sales rising by 4%.
Looking ahead, investors were optimistic about The Procter & Gamble Company (NYSE:PG)’s guidance, which projected organic sales growth of 3% to 5% and overall revenue growth of 2% to 4%, surpassing the consensus estimate of 1.4% growth. The company also expects core EPS growth of 5% to 7%, with earnings ranging from $6.91 to $7.05, excluding foreign exchange challenges. This outlook is slightly above analysts’ estimates of $6.93.
The Procter & Gamble Company (NYSE:PG) is one of the best dividend stocks on our list as the company holds one of the longest dividend growth track records in the market, spanning over 68 years. Its cash position has enabled the company to achieve this feat. In the most recent quarter, the company reported an operating cash flow of $4.8 billion and its free cash flow productivity was 84%. Moreover, the company paid $2.4 billion worth of dividends to shareholders. Its quarterly dividend comes in at$1.0065 per share and has a dividend yield of 2.44%, as of January 22.
Of the 900 hedge funds tracked by Insider Monkey at the end of Q3 2024, 68 funds held stakes in The Procter & Gamble Company (NYSE:PG), up from 64 in the previous quarter. These stakes have a collective value of over $8.8 billion.
Overall PG ranks 4th on our list of the best diversified dividend stocks to buy now. While we acknowledge the potential for PG as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
