Blue Chip P&G Attracting Some Aggressive Players


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Blue chips rule in today's stock market with the Dow Jones industrial average outpacing the growthier Nasdaq so far this year.

It's been awhile since that's happened, but successful investors don't fight the trend.

Procter & Gamble ( PG ), a member of the Dow, is up about 17% this year.

The first thing investors might consider about this traditionally conservative play is the quality of support.

In Q1, Fidelity Contrafund opened a new position in Procter & Gamble. Fidelity Balanced Fund upped its position about 2%, and Fidelity Magellan Fund jacked up its position 49%.

If funds that are known for bold management are buying P&G, individual investors should probably take notice.

Few stocks show steadier earnings growth than P&G, the holder of top brands such as Charmin toilet paper, Pampers diapers, Bounty paper towels and Tide detergent.

Procter's three- and five-year Earnings Stability Factors are 1 and 2. The scale runs from 0 (calm) to 99 (erratic).

Profit margins also are steady. In the past nine years, pretax margin has varied from 17% to 19%.

Return on equity, a gauge of financial efficiency, was 17.4% last year, a more than respectable percentage.

On Monday, the company announced it was raising the quarterly dividend from 56.2 cents a share to 60.15 cents a share. The company has increased its dividend 57 consecutive years.

The current annualized yield is 3%.

P&G's largest customer isWal-Mart Stores ( WMT ), which accounted for 14% of net sales in fiscal 2012 ended in June.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Personal Finance Investing Ideas
Referenced Stocks: PG , WMT

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