While the broader economy is always dealing with some level of uncertainty, it seems that investors are more on edge. There's a lot to be concerned about, like shifting trade policies, geopolitical tensions, inflationary pressures, and the impact artificial intelligence can have on the labor market.
In times like these, investors might panic since they feel the need to correctly predict the future to put money to work. Instead, consider protecting the downside. Here's where safety can be found in solid defensive companies that provide a steady stream of income, regardless of whether we're in a recession or experiencing boom times.
This consumer staples stock might be exactly what you need right now.
Image source: Getty Images.
Nothing seems to stop these dividend payments
You'd struggle to find a business that has a track record like Procter & Gamble (PG +0.09%). The company, which sells some of your favorite household items ranging from laundry detergent and shampoo to diapers and paper towels, is scheduled to pay a quarterly dividend of almost $1.09 in May. This supports an extraordinary streak. The company has paid a dividend in 136 straight years.
And these payouts have increased for 70 consecutive years. This makes it a "Dividend King," an exclusive club for businesses with at least 50 straight years of dividend hikes.
This kind of consistency is unheard of. But it points to the durability and staying power Procter & Gamble possesses. Its products are desired in good and bad economic times, which drastically reduces risk for investors.
Think of the headwinds that this business faced throughout its history. There were wars, economic crises, and even a global pandemic. Procter & Gamble never veered off course, making it a strategic priority to return capital to its shareholders.
NYSE: PG
Key Data Points
Trading in market outperformance for low risk
The S&P 500 index's trailing-10-year total return (as of April 23) of 305% is more than double the 130% total return that Procter & Gamble generated. This isn't surprising, given that the company's quarterly net income climbed by just 34% over the last decade. This is an extremely mature business, so don't expect high growth.
According to sell-side analysts' consensus estimates, Procter & Gamble's revenue is expected to increase at a compound annual rate of 3% between fiscal 2025 and fiscal 2028.
While investors won't outperform the market, they do benefit from minimal downside. For instance, shareholders don't have to worry about the threat of technological disruption, which could have a greater impact on other parts of the economy.
Procter & Gamble's defensive nature alleviates any fears that might be more prominent today with the advent of AI.
