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At its shareholder meeting held on Oct 8, 2013 in Cincinnati, consumer giant The Procter & Gamble Co. (PG - Analyst Report) declared shareholder value creation to be its top priority and reiterated the strategic initiatives adopted to improve performance.

In order to improve the company’s operating performance, new chief operating officer (CEO), A.G. Lafley unveiled a strategy, which focuses on value creation for shareholders through sales growth, gross and operating margin expansion and strong cash flow productivity. The company outlined four steps to achieve its target.

The company will invest selectively in core businesses, which include the most profitable categories, brands, markets, channels and customers. The other three initiatives include, making strategic, focused investments in innovation and go-to-market capabilities, accelerating cost savings and productivity improvements and improving operating discipline.

While the company’s U.S. business is stable, P&G is expanding its presence in the developing markets to capture the increasing growth opportunities as the developed markets are nearing saturation. It is also localizing production in developing countries to improve customer service and lowering supply chain costs to boost margins. The company’s volume and market share growth trends in the developing markets have been encouraging.

Procter & Gamble generates strong free cash flow annually, which allows it to invest in product innovations, acquisitions and brand development as well as return shareholders through and buyback and dividend distribution The company repurchased shares worth $6 billion in fiscal 2013, $4 billion in fiscal 2012 and $7 billion in fiscal 2011. In fiscal 2014, the company expects to repurchase $5 billion–$7 billion shares.

Moreover, since its incorporation in 1890, P&G has continued to pay dividends for 123 consecutive years. The 7% dividend hike in April was the 57th consecutive year of dividend increase. Impressively, over the last 10 years, P&G has returned $98 billion of cash to shareholders, through both dividend and share buybacks, which is 90% of its reported earnings.

P&G carries a Zacks Rank #3 (Hold). Though all its afore-mentioned plans sound encouraging, we prefer to wait until these drive substantial organic revenue growth. Moreover, challenging consumer spending environment in the U.S. and volatile market dynamics in other countries remain overhangs.

Other consumer staples stocks that are worth considering include Pinnacle Foods Inc. (PF - Snapshot Report), Green Mountain Coffee Roasters, Inc. (GMCR - Analyst Report) and Inventure Foods Inc. (SNAK - Snapshot Report). While Pinnacle Foods carries a Zacks Rank #1 (Strong Buy), Green Mountain and Inventure Foods hold a Zacks Rank #2 (Buy).

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