As a 179-year-old diversified producer of household products, Procter & Gamble (NYSE: PG) is often regarded as one of the most risk-free stocks on the market.
It's a Dividend Aristocrat to boot, having raised its quarterly payout for 60 consecutive years, and now offers a healthy dividend yield. Selling product like soap, laundry detergent, and razors that are as timeless now as they were a century ago, the company seems to have a business built to last.
As a defensive stock, it's worth noting that P&G may be more likely to outperform the broader market during a sell-off. Perhaps more importantly for dividend investors, the company's dividend growth has slowed dramatically.
In the last two years, it hiked its dividend by 3% and then just 1%. With a payout ratio of 73%, the company has some room to raise its dividend faster than that, but without significant increases in earnings growth it will be hard for the company to beat low-single digit increases.
Ultimately, what defines risk for an investor is the chance of losing money on a given investment. With its solid dividend payout and stable of diversified brands, investors can probably count on a modest return from P&G in the coming years, but its recent underperformance against the S&P 500 is a lesson. Even for investors looking for low-risk stocks, there are probably better places to put your money.
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