Every four years, the world stops to watch the winter and summer
Olympic Games, as individuals and teams compete to take home the gold
medal for their respective countries. Though the goal is to bring home
the gold, silver and bronze medals, the simple chance to participate in
the games is still quite impressive.
In the
investing world, I like to compare the remarkable Olympic athletes to the
stocks that comprise the consumer-staple sector, one of the safest sectors to invest in during the past five years. Stocks like
General Mills (NYSE: GIS),
Kraft Foods (NYSE: KFT),
Colgate-Palmolive (NYSE: CL) and
Procter & Gamble (NYSE: PG) are true winners, having offered better returns with less volatility and risk than the
benchmark S&P 500
Index. In addition, this group of stocks has also a strong track-record of providing higher yields and
dividend increases.
And within the sector, there is one particular stock taking home
gold and silver medals as it holds the No.1 or No. 2 position in the key
categories in which it competes. Four of the firm's brands generate
more than $1 billion in sales annually. Though its product line may
appear quite boring with diapers, tissues and toilet paper making up the
majority of the company's sales, it has been consistent and delivered
impressive profits during the past few decades.
But even being successful, many companies stumble and lose their
shine. Just like an aging worn-out athlete, sometimes it make sense to
replace these companies when they are past their
prime.
(more)
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