The ‘safest of safety stocks’

CNBC’s Jim Cramer on Thursday advised investors to consider Procter & Gamble as a potential buy to weather the turbulent market.

“I’ve been telling you to stick with the market even in the face of some frightening developments over the past few weeks, but you need some cash and you need some conservative stocks,” the “Mad Money” host said. “This is one of them … Procter and Gamble is the safest of safety stocks.”

“You want something that can cope with rising raw costs by passing them on to the consumer because they have scale and superior brands that can command higher prices,” he added, praising the company for its pricing power but cautioning that it isn’t completely infallible to inflation.

P&G shares rose 0.37% in Thursday’s trading session, though the stock is still down 5.64% from the start of the year. It’s also down around 6.7% since touching an intraday all-time high of $165.35 on Jan. 21, which means the stock is currently at a “nice discount,” Cramer said.

P&G said in its fourth-quarter earnings call in January that it will implement more price increases this year after raising some prices earlier in the pandemic, which helped grow its health-care and fabric and home-care segments.

Cramer pointed to a bevy of other reasons P&G deserves investors’ dollars as Russia’s invasion of Ukraine and soaring inflation continue to ravage the stock market. Cramer highlighted the company’s “voracious buyback” — P&G forecasts $9 billion to $10 billion in stock buybacks for the fiscal year — and its long-standing trend of raising dividend paybacks.

The host also credited the company’s better-than-expected fourth-quarter earnings and revenue, as well as its geographic mix, for its ranking as a top safety stock.

“We do have to redefine safety: it’s not even for your sales to be recession-resistant, you also have to have your earnings to be inflation-resistant,” he said.

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