Just Buy This 15% Yielder: The Procter & Gamble Company (PG)

On the other hand, Colgate-Palmolive Company (NYSE: CL) released its 4Q 2012 earnings on the Jan. 31. Organic sales grew 4% in the North American region, and market share was up in at least 7 segments. Toothpaste share increased 1%, which is the largest in the last 10 years. In the toothpaste category, new products like Colgate Total Zx Pro-Shield Plus Sensitivity and Colgate Optic White Dual Action are all set to do pretty well in the coming years. Furthermore, the company is also excited about its new toothbrush, Colgate 360 Total Advanced Floss Tip.  Apart from oral care, Colgate-Palmolive has full range of products lined up in personal and household care. Colgate-Palmolive is currently trading at a forward P/E (1yr) of 16.87x and a mean recommendation of 2.6 on the sell side. Moreover, it’s yielding a dividend of 2.30%. In short, just like Unilever, Colgate-Palmolive is a good buy but isn’t that attractive as P&G.

Conclusion

Thanks to its hugely diversified portfolio, the fast moving consumer goods’ sector has largely remained a non cyclical sector in the past. The same thing happened in 2012 as the global economy continued to shrink but the consumer sector outperformed other sectors. As a result, the three big market players enjoyed a significant chunk of profits.  The good news for P&G came from the emerging markets where it continued to capture huge market share, whether it was the household or the personal care segment. 2013 won’t be that different either, as the company plans on investing more into the BRIC nations. The bottom line is that Procter and Gamble will continue to outperform its peers in the years ahead; hence, it remains the top buy in the FMCG sector. In short, we recommend buying P&G for a yield of at least 15%.

The article Just Buy This 15% Yielder originally appeared on Fool.com and is written by Waqar Saif.