Edge Alert: This “Anti-Dollar” Play Is A Screaming Buy!
There’s a high-stakes battle going on right now…
One that pits an activist billionaire against the CEO of a $237 billion dollar company. A battle featured in financial headlines and one that has commanded prime time placement on TV stations like CNBC, Bloomberg TV and Fox Business News.
This power struggle may go down in history as one of the biggest corporate conflicts in history!
And yet for investors, the outcome of this conflict is completely irrelevant.
Today, I want to show you why this blue-chip cash cow deserves a spot in your portfolio, regardless of who wins the battle, because this company is poised to move significantly higher, no matter who is at the helm.
Let me explain…
A 61-Year Investment Staple
Procter & Gamble (NYSE:PG) is arguably the most dominant consumer staples company in the world. With brands like Cascade detergent, Charmin bath tissue, Crest toothpaste, and Comet cleaning powder (that’s just the brands that start with “C” !!), the company has earned the business of millions and millions of consumers around the world.
As a consumer staples company, P&G operates a very reliable and profitable business.
After all, you’re always going to replace your toothpaste, toilet paper, and shampoo… regardless of the economic climate or who is in the white house.
So it’s no wonder that P&G has generated lucrative profits throughout the years, regardless of whether the global economy is in growth mode or recession. These profits have given P&G the ability to raise its dividend year after year…
…for sixty one consecutive years!!1
That’s an impressive feat that has captured the attention of investors around the world. Today, Procter & Gamble is regarded as the gold standard, not only when it comes to consumer staple products, but also in terms of reliable cash-generating investments.
Of course, I’ve included Procter & Gamble in my long-term portfolio of dividend stocks for my Lifetime Income Report newsletter. In my opinion, no dividend investment portfolio is complete without some exposure to this iconic cash generator.
But while P&G’s profits and dividends are some of the most reliable in the world, the company is not without a bit of drama…
The Dramatic Struggle to Control P&G
Recently, P&G has made headlines thanks to a power struggle in the company’s boardroom.
To make a long story short, billionaire activist investor Nelson Peltz is trying to shake things up at P&G.
As the co-manager of Trian Fund Management L.P., Peltz has invested $3.5 billion of his fund’s assets into P&G. Through this large investment, Peltz is seeking a board seat which will give him more influence over the company.
In addition to this seat, Peltz has been very public with his criticism of P&G’s management, going as far as to write a white paper covering many of the changes he would advocate if he were elected to P&G’s board.
Unfortunately David Taylor — the current CEO of Procter & Gamble — has resisted Peltz. I think the company would be better served to welcome Peltz into the boardroom and work with him to improve what is already a very solid company.
As is often the case, the financial media has been running with stories about the drama in P&G’s boardroom, while completely missing out on the big picture.
You see, aside from the petty squabbles between Peltz and Taylor, there is a much more important issue driving shares of P&G. This issue is what you as an investor should be paying attention to…
The U.S. Dollar is What REALLY Matters
Shares of P&G have been trading higher this year, up 7.3% in 2017 and logging most of that gain in just the last four months.
More importantly, the stock is very close to its all-time high of $93.89, hit in December of 2014. Keep in mind that thanks to the company’s 3.0% dividend yield, the stock’s total return (including dividends) has actually surpassed that high.
And why is P&G moving higher? Is it because investors are expecting great things from Peltz and his corporate shakeup?
The primary reason P&G is trading higher is because of the weak U.S. dollar.
That’s right… We’ve been talking about the sad state of the U.S. dollar here at The Daily Edge for some time now. In case you somehow missed it, here’s an updated picture of the slumping value of the dollar:
While a lower U.S. dollar will erode the value of your nest egg, it does have some advantages for investors who are paying attention.
We’ve talked a lot about resources such as precious metals and industrial commodities, and how owning those commodities (or companies that produce those commodities) can protect you against a falling dollar.
Another great way to protect against a weak dollar is to own blue-chip international companies like P&G.
You see, when the U.S. dollar is weak, it makes P&G’s products more competitive overseas. Think about it this way… It may cost P&G the same amount of dollars to produce its consumer products. But when it sells those products in euros, yen or other currencies, the higher value of those other currencies translates into bigger profits for P&G.
That’s exactly why shares of P&G are approaching new highs. And with the dollar likely to continue to trade lower, you should have some exposure to big international companies like P&G.
So while the media is focusing on power struggles and boardroom drama, you know exactly what is going on with P&G’s share price, and hopefully you’re locking in your own share of the company’s lucrative profits.
Here’s to growing and protecting your wealth!