PG Has Pricing Power

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Right now pricing power is the name of the game – “Inflation-Proof Stocks In Demand” [SUBSCRIPTION REQUIRED], WSJ B1, Monday 4/18

There was an article in today’s WSJ on the demand for “inflation-proof” stocks. This is exactly the right idea though the article went down the wrong rabbit hole in its discussion of travel and leisure stocks. If you want pricing power, you want consumer staples with great brands. And if you want consumer staples with great brands, you want Procter & Gamble (PG).

PG is the premier consumer staples company in the world with brands we all use everyday like Tide laundry detergent, Crest toothpaste and Old Spice deodorant and anti-perspirant. In a stagflationary economy, consumers will cut back on travel and leisure but they won’t cut back on toothpaste – at least I hope you won’t.

$400 billion PG is by no means cheap at just under 27x its core EPS guidance for its fiscal year 2022 ending in June. But you can sleep well at night knowing that people are going to keep buying toothpaste, laundry detergent, deodorant/antiperspirant and the other necessities PG sells come hell or high water – and even when PG raises prices. PG reports earnings Wednesday morning.

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