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Tom Nash
Tom Nash

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Episode 9 out of 30 - Inflation Friendly Stocks

Hey Patreons, this is episode 9 out of 30 in our inflation friendly stocks.

As I mentioned, there are number of industries that tend to perform better during inflationary times, with home & personal care commodities being one of them. In this post I want to share with you a stock which I feel will be a great fit for inflationary times.

The stock is $PG - Procter & Gamble

Procter & Gamble is a company that generates stable and very consistent revenues every year. I'll be honest, PG will never be the next PLTR or TSLA and it won't generate returns similar the exciting growth stocks in the market right now, but it doesn't need to. However, PG is expected to provide stable returns over the long term which sets it up to benefit from the expected inflation and the expected spike in construction as a result.

Short interest in only 0.69% and the company is trading at a market cap of $330 Billion, generating about $70B in revenues per year. The company has impressive margins with a gross profit of 52.39%, EBITDA of 28% and NET Income of 19%, and that is extremely impressive. 

As mentioned earlier, the growth is minimal at about 5% per year, but the income stream seems to work like a clock, right on time every year, which makes this into a very interesting stock, especially given the loss of 13% of its share price over the past 12 months. 

PG also is expected to yield a 2.6% dividend this year, which is always something to consider with inflation friendly stocks, and with a total assets of 117 billion over 70 billion in liabilities its financials are very attractive. 

P&G remains one of the strongest businesses in the home & personal care commodities space, and it clearly outperformed the category over the past few years, and is expected to do even better during the higher inflation times ahead. 

DISCLAIMER: All of Tom's trades, strategies, and news coverage are based on his own opinions alone and are only done for entertainment purposes. If you are watching To'ms videos, please Don't take any of this content as guidance for buying or selling any type of investment or security.  Tom Nash is not a financial advisor and anything said on this YouTube channel should not be seen as financial advice. Tom is merely sharing his own personal opinion. Your own results in the stock market or with any type of investment may not be typical and may vary from person to person. Please keep in mind that there are a lot of risks associated with investing in the stock market so do your own research and due diligence before making any investment decisions.

Comments

Hi I'm wondering how 2.x% is good against inflation? If inflation is at 6% how do you profit from 2% dividents? Please explain :/

Thibault

You slow rolling these or recognizing deflation?

CINEPEDIA

Thank you for all your work. Really appreciate the ideas. Just to remark, I have a very simple cut off rule: I should expect return of 11% to consider stock. Otherwise it is better to buy SP500 or total market ETF. I like PG and Buffett but for PG, roughly, I have 5% EPS growth + 2.5% div yield = 7.5% total return. (Also, I like consumer staples both generally and during elevated inflation)

Ray

+2 on the above

Harry Rao

Sounds good! Any target price? Or just buy and forget?

Adrien


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