(PG) - Charles Carlson, DRIP Investor newsletter - companies whose business models should hold up regardless of economic conditions

Charles Carlson, editor of the DRIP Investor newsletter, highlights a large-company defensive name that is a leading provider of household products. Read this featured expert's commentary and receive an update in the company's recent performance. Afterward, learn Carlson's outlook on the stock. P&G A Play on Large Caps, Defensive Stocks from October 2 An emerging theme in the stock market is the rebound in large-company stocks, especially mega-cap stocks. A parallel theme is the continued attraction of “defensive” stocks — companies whose business models should hold up regardless of economic conditions. One stock that fits both of these themes nicely is Procter & Gamble (PG). The company, a component of the Dow Jones Industrial Average, is a leading provider of household products. The firm should see its top and bottom lines hold up even if the economy slips. Profits are expected to be a record in the current fiscal year, and long-term prospects are excellent. Charles Carlson has owned Procter & Gamble stock for several years and has been rarely disappointed. DRIP investors should consider these shares a core holding for any portfolio. Corporate Profile Procter & Gamble is the home of some of the strongest consumer brands in the world. Brands include Tide, Swiffer, Cascade, Head & Shoulders, Olay, Sure, Pampers, Charmin, Bounty, Pringles, Crest, and Prilosec OTC. The firm expanded its operations with the October 2005 acquisition of Gillette. Fiscal 2006 ended in June was a solid year for the company. Net sales increased 20% for the fiscal year. The firm achieved organic sales growth of 7%, with every business segment delivering organic sales growth for the fiscal year. Excluding dilution from the Gillette acquisition, earnings per share rose around 12%. The company's efficient operations generated $8.7 billion in free cash flow for the fiscal year. That cash generation gives the firm plenty of options in the way of future acquisitions and stock buybacks. P&G, trading at 21 times fiscal 2007 earnings estimate, is not a cheap stock. Still, these shares merit a premium valuation given the company's steady performance. Dividend investors take note that Procter & Gamble's payout has more than doubled since 1999. The company currently pays a quarterly rate of $0.31 per share, giving the stock a yield of 2.0%. Conclusion Steady, dependable growers will be highly prized should Wall Street fears of a slowdown in corporate earnings increase. Procter & Gamble is the antidote for uncertainty. While the stock is not likely to be at the top of the leader board in any one year, Carlson expects these shares to produce market- beating returns over the next several years. Please note that Procter & Gamble's direct-purchase plan permits initial purchases with a minimum $250. This article highlights the commentary of Charles B. Carlson for the Zacks.com audience. Charles B. Carlson provides insightful analysis, market commentary, and favorite recommendations on a timely basis in "DRIP Investor" newsletter. Try it free for 30 days and see if you can improve your investment performance. Learn more about "DRIP Investor" and 30-Day Free Trial. And get immediate access to current issues and special reports. Click here now. Here's How You Can Profit from the Pros Find out what other leading experts are saying about the market. And what stocks they are recommending. For free. Just sign up for our free email newsletter, Profit from the Pros, where we'll give you the commentary, advice, and insight from those rare few experts who consistently beat the market year in, year out. | Blog Home| VitalStocks Home