Ask Matt: Is Procter & Gamble a good bet?

Q: Is Procter & Gamble a good bet?

A: If you brush your teeth with Crest toothpaste or shave with Gillette razers, you’ve come in contact with Procter & Gamble’s (PG) products. The shares are also commonly held in investors’ cabinets.

Shares of P&G are up more than 13% over the past year, which trounces the roughly 3.5% gain by the Standard & Poor’s 500. Meanwhile, the consumer products company pays a 3.1% dividend yield, which tops the roughly 2% yield on the market. But while the stock’s characteristics of a steady dividend and the company’s position in stable markets have been appealing, investors need to know that P&G hasn’t been a growth story in some time.  The company Tuesday reported quarterly adjusted profit of 79 cents a share, which was down 21% from the same year-ago period. That profit was better than expected, but revenue also fell 9.5% to $16.1 billion. Investors are banking on the company’s efforts to focus on faster-growing products. Adjusted earnings per share is expected to rise 8% in the current fiscal year, says S&P Global Market Intelligence. Analysts are positive on the stock, rating it an “outperform” but still only see it being worth $86.18 in 18 months.  That’s just about where these stock is now.

Paste BN markets reporter Matt Krantz answers a different reader question every weekday. To submit a question, e-mail Matt at mkrantz@usatoday.com or on Twitter @mattkrantz.