The stock market on Thursday flew past the 20% decline that traditionally marks the end of a bull market and finished the day roughly 26% down from record highs just a month prior. Many individual stocks have fallen far more than that over the course of the past month. The economic news looks menacing, with the World Health Organization officially declaring the novel coronavirus outbreak a pandemic.

Whatever path COVID-19 (the disease caused by the coronavirus) travels from here, it's clear that most industries will see at least a short-term impact from consumer efforts to limit their activities. But that doesn't necessarily mean stocks are now bad investments, even if volatility is likely to be elevated going forward.

With that big picture in mind, let's look at why Procter & Gamble (PG -0.69%) looks even more attractive after its latest stock price decline.

A mother and daughter play while doing laundry.

Image source: Getty Images.

Solid growth

Many investors flock to so-called defensive stocks during times of market slumps, and P&G fits into that category since it dominates consumer staples categories such as diapers and home cleaning supplies. The Bounty brand, for example, accounted for 40% of all paper towel sales in the U.S. last year.

But P&G's business has been looking more like a traditional growth stock than a defensive stock lately. Despite major economic disruptions in places like the U.K., Australia, and Turkey last quarter, organic sales jumped 5% last quarter and rose by 6% during the six months of its fiscal year. Rival Kimberly-Clark (KMB -0.05%), meanwhile, has been growing at about a 4% pace. Procter & Gamble also beats its smaller peer in the quality of its growth, considering it achieved a balance between higher sales volumes and increased prices last quarter.

Stellar cash flow

There's no denying the strength of P&G's finances, either. Operating cash flow is up to $8.5 billion over the last six months compared to $7.6 billion a year ago. Cost cuts combined with years of efficiency gains to push earnings higher by 15% last quarter after adjusting for currency exchange swings. Kimberly-Clark is boosting its profits at closer to a 5% pace.

Meanwhile, P&G's cash position was so strong last quarter that management raised its stock buyback outlook for the year despite expectations for slightly slower growth in fiscal 2021's second half.

That cloudy outlook

At this point, it appears likely that the novel coronavirus outbreak will threaten the 2021 sales outlook when P&G issues its third-quarter results in mid-April. As of Wednesday, the company is predicting sales gains of around 4.5% this year, with faster earnings gains on tap.

At the very least, those financial targets will have more risk embedded in them thanks to changing consumer behavior and slowing economic growth in key markets in Europe, Asia, and elsewhere. Yet investors can look beyond that slump and choose to buy this high-quality business at a discount from the highs it set in early 2020.

Yes, the next few weeks and months might send the stock price swinging. But the value of the business isn't changing by nearly as much. For example, it's a near-lock that P&G will announce a robust dividend increase in a few weeks that reflects its accelerating sales growth and increasing profitability.

That hike would mark the company's 64th consecutive year of annual dividend raises and is a good reminder that its operating model is flexible enough to thrive through all kinds of selling environments. And as an extra bonus, the stock price decline has pushed the dividend yield back over 2.6% for the first time since mid-2019.