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Zacks Investment Ideas feature highlights: W.W. Grainger, Procter & Gamble and McDonald's

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For Immediate Release

Chicago, IL – May 5, 2023 – Today, Zacks Investment Ideas feature highlights W.W. Grainger (GWW - Free Report) , Procter & Gamble (PG - Free Report) and McDonald’s (MCD - Free Report) .

3 'Boring' Stocks Crushing the S&P 500 Over the Past 5 Years

During volatile periods in the market, a more conservative approach should be considered. Investors can implement the style in several ways, including targeting companies with an established track record of success throughout decades of operations.

Three Dividend Aristocrats – W.W. Grainger, Procter & Gamble and McDonald’s – are all examples of companies that have stood the test of time.

And while these investments are typically labeled as ‘boring,’ their stability is undeniable. Below is a chart illustrating the total return performance of all three stocks above over the last five years, with the S&P 500 blended in as a benchmark.

Perhaps to the surprise of some, all three have outperformed the S&P 500 in this more extended timeframe, which doesn’t sound very ‘boring’ to me.

Procter & Gamble

Consumer Staples titan Procter & Gamble posted better-than-expected results and provided optimistic guidance in its latest release, helping shares close 3.5% higher post-earnings. Earnings improved 3% year-over-year, whereas revenue saw growth of 4%.

The company’s revenue growth has been steady over the last five years.

PG’s annual dividend currently yields 2.4%, below the Zacks Consumer Staples sector average modestly. In addition, the company’s 6.3% five-year annualized dividend growth rate is undoubtedly a major positive.

Shares are a bit expensive at the moment, with the current 26.7X forward earnings multiple well above the 24.1X five-year median.

PG currently carries a Style Score of “D” for Value.

W.W. Grainger

Analysts have raised their earnings expectations across all timeframes for GWW over the last several months, pushing the stock into a Zacks Rank #2 (Buy).

The company’s dividend presently yields a respectable 1% annually, with a payout ratio sitting sustainably at 21% of its earnings. The company has shown a commitment to increasingly rewarding its shareholders.

On top of a shareholder-friendly nature, W.W. Grainger’s growth projections are solid, with earnings forecasted to climb 18% in its current fiscal year (FY23) and a further 6% in FY24.

McDonald’s

McDonald’s posted results that came in well above expectations in its latest print, delivering a positive 14% EPS surprise. Currently, the stock sports the highly-coveted Zacks Rank #1 (Strong Buy).

MCD’s annual dividend currently yields 2.1%, nearly double that of the Zacks Retail and Wholesale sector average. Impressively, the company’s payout has grown by 10% just over the last year.

Bottom Line

For those seeking reliability, all three Dividend Aristocrats above could be considered.

All three sport a favorable Zacks Rank, have provided market-beating returns over the last five years, and are fully established with decades of operations.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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Procter & Gamble Company (The) (PG) - free report >>

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