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Build a Recession-Resistant Portfolio With Procter & Gamble Stock

Looking for thrills and opportunities through extreme volatility swings? If so, then Procter & Gamble (NYSE:PG) stock isn’t what you’re seeking. Yet, given the state of affairs in the world and the economic landscape, investing in Procter & Gamble makes a lot of sense right now.

If you live in the U.S., there’s a good chance that you use Procter & Gamble’s products without even knowing it. The company sells Crest toothpaste and Oral-B toothbrushes, Head & Shoulders shampoo, Tide laundry detergent and too many other household products to mention here.

Brand-name familiarity doesn’t necessarily equate to consistent profitability, however. So, let’s conduct our due diligence right now and delve into the financial details surrounding Procter & Gamble.

Is PG Stock a Good Value Now?

Procter & Gamble might offer good value to its customers, but what about the shareholders? Based on a commonly cited metric, I would conclude that PG stock is a decent but not a great value.

Specifically, Procter & Gamble has a trailing 12-month price-to-earnings (P/E) ratio of 24.43x. On the face of it, this doesn’t seem outrageously high. However, it’s higher than the sector median P/E ratio of 19.87x.

Furthermore, PG stock would need to decline somewhat before it reaches its 52-week low of $122.18. Hence, there might not be a screaming buy or a once-in-a-lifetime bargain here.

But then, that’s not why you might invest in Procter & Gamble right now. Holding some Procter & Gamble shares is a way to add some safety and diversification to your portfolio.

Maybe you’re concerned about geopolitical flashpoint events occurring in the world today. Or, you might be worried about high-interest rates and frustratingly persistent inflation.

Even during geopolitical turmoil and challenging times for the economy, people will still buy Procter & Gamble’s household products. These are evergreen products and household staples – and this is why PG stock doesn’t shoot to the moon during the good times but also doesn’t collapse during the not-so-good times.

Procter & Gamble: Mark This Date on Your Calendar

Besides, a good value isn’t always expressed in a company’s P/E ratio. Procter & Gamble is a rock-solid company because it has an excellent track record of profitability and beating quarterly EPS estimates.

For the fourth quarter of fiscal 2023, Procter & Gamble grew its net sales by 5%, its organic sales by 8%, and its diluted and core EPS by 13%. That’s not too shabby during a time of rising interest rates and recession worries.

If you want to be extra cautious, you might choose to wait until Procter & Gamble’s next quarterly earnings report. This is expected to happen on Oct. 18, so definitely mark your calendar for that date.

Whether you decide to buy PG stock before or after the upcoming earnings event, I encourage you to hold on for the long term and reinvest the dividend payments. Currently, Procter & Gamble offers a forward annual dividend yield of 2.61%.

Start Slowly and Build a Defensive Position With PG Stock

Procter & Gamble shares aren’t trading at a rock-bottom price now. On the other hand, Procter & Gamble offers a decent value as the company is consistently profitable and has products with year-round appeal.

Therefore, Procter & Gamble is a company that investors can rely on for stability in good and bad times. I encourage you to consider buying a few shares of PG stock today, and possibly adding to that position after the Oct. 18 earnings event.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.