With the year almost over, we’re taking a look at all 30 stocks in the
Dow Jones Industrial Average,
starting with the worst performers—
Walgreens Boots Alliance
—and working our way up to the highest-flying stock in the benchmark—
The ranking may shift before the close of 2020 trading, but the stories behind the stocks shouldn’t.
Procter & Gamble benefitted from the Covid-19 pandemic as consumers flocked to its cleaning products. While that may wane in the year ahead, the company could still be poised for growth.
Procter & Gamble
(ticker: PG) is up 10.8% in 2020, while the Dow has gained 6.3%.
Although P&G began the year with an earnings miss, it has delivered three strong reports since. The shares didn’t react much in April, as demand for cleaning products was hampered by concerns about a strong dollar and the uncertain outlook at the start of the pandemic.
Yet the company has been raising its dividend while continuing share repurchases, and its July results showed that even economic uncertainty couldn’t dampen sales of its portfolio of premium cleaning products. The company turned in another strong quarter in October, as organic sales continued to shine.
Naturally, 2021 will present a challenge for P&G, as the receding threat of the virus will take some focus off cleaning. Yet others argue that the standard for cleaning will permanently be higher post-pandemic, to the benefit of P&G and peers. In addition, P&G has historically had one of the higher organic growth rates in the staples industry. Those metrics will certainly fall a bit in 2021, but if it can continue to show that it’s resonating with consumers, the shares need not fade with Covid.
Analysts seem fairly bullish about P&G. Of the 24 analysts tracked by FactSet, 62% have a Buy rating or the equivalent, while a third are Hold-rated and there is one bearish call. The average analyst price target is $153.05.
P&G will report earnings in January, and could surprise on the upside again, given that coronavirus infection rates have spiked in recent months, renewing consumers’ focus on cleaning products.
Write to Teresa Rivas at [email protected]