P&G stable shares can give solid gains over long term

When we talk of Procter & Gamble, we have to look at their international website to get some pearls of wisdom relating to their employees. In 1887, before P&G was even a publicly traded company, William Cooper Procter introduced a profit-sharing programme for employees to let the employees share in the firm’s earnings as an incentive to increase their earnings. Later in 1903, he revised that programme to award profit-sharing in the form of the P&G stock. He reasoned that as employees became shareholders, their economic interests and those of the company would be bound more closely together. P&G has a strong history of operating with integrity in all countries, at all levels.

Procter & Gamble Hygiene was incorporated in India in 1964 and manufactures, distributes and markets three major brands in the country— Whisper Sanitary Pads, Vicks and Old Spice. The coronavirus pandemic has been leading to lasting changes in consumer habits and behaviour.

But the company expects healthy growth and profitability on the back of strong brands, wide distribution network and new product launches.

Analysts have given a buy rating to Procter & Gamble Hygiene stock with a price appreciation of 20% in the next 12 months’ time frame as long term prospects remain attractive on account of strong moats.

The other listed company from the P&G stable is Procter & Gamble Health Limited (formerly Merck Limited), one of India’s largest VMS companies manufacturing and marketing over-the-counter products, vitamins, minerals, and supplements products for a healthy lifestyle and improved quality of life. With a strong portfolio of brands, Procter & Gamble Health Limited combines the best of P&G and legacy Merck’s Consumer Health capabilities and cultures. The shares of P&G Health are quoting at Rs 4,160 and can deliver 20% price rise in the next one-year time horizon. To sum up, investors looking at MNC companies can buy both the India listed Procter & Gamble firms in smaller lots and hold for solid portfolio gains over the long term.

Rajiv Kapoor is a share broker, certified mutual fund expert and MDRT insurance agent.