Procter & Gamble (PG), the largest U.S. household products company, has been a standout income stock for years thanks to its robust dividend payouts. However, recent financials hint at a slowing sales growth and challenges in certain regions, prompting investors to reassess whether now is the time to buy or hold.
While PG’s beauty and grooming segments saw a decline in product mix, the company remains well-positioned to retain customers as preferences shift toward value products. Despite this, concerns about slower volume growth and currency risks—given its global exposure—are weighing on performance.
Free cash flow (FCF) has been strong, allowing PG to maintain its dividend increases while repurchasing shares. This underscores its ability to weather challenges while delivering returns to shareholders.
Investors should also consider the company’s long-term strategy, including pricing power and its ability to outperform in key categories like Greater China, Asia, and Africa. With a P/E ratio of 27.8, PG remains a safer but not overly attractive buy compared to other income stocks.
Looking ahead, while P&G faces headwinds, its leadership position in daily-use products suggests resilience. Whether now is the right time to invest depends on how the company addresses these challenges and performs in the upcoming quarters.
Source: https://www.fool.com/investing/2025/01/21/dow-jones-dividend-king-stock-buy-passive-income