Procter & Gamble (PG)

They keep innovating unlike peers like Kraft. Doesn't know the valuation, but it's a fine company. This will do well. But he'd rather buy Google, Facebook or Apple for more growth. PG will barely grow.

Consumer staples stocks grew on a search for yield. But the problem is the stock price will fall, which is what's happening now as interest rates rise. The lure of yield stocks is not as strong anymore.

Consumer staples stocks have been under a lot of pressure because of who they sell to (buyers are putting pricing pressure on them) and competition from start-up local brands. This is pressuring their margins. She has not owned P&G for years. Back then, innovation flowed through the company (more so than now). They are in beauty care, which she likes, but they have to do more product innovation. The company is trying to do that, but not enough. In this space, she would invest in Mondelez (MDLZ-O) or Unilever PLC (UL-N) because of their exposure to emerging markets.

This is down about 15% this year. From an entry perspective, it is looking more attractive; however, the P/E is still around 19 times. The yield is also supportive. The company has been focusing back to its core brands and this will take time. He would price in some further downside, but sees this as a time to step into 1/3 of your target holding. Yield 3.5%.

A classic consumer growth stock that's struggling now. Today, Facebook and Google are better companies which have the same PE. PG has used all its levers, including buying back stock. Its debt equity ratio has risen. He doesn't own this sector which is out of favour globally. PG is also hurt by the shift in U.S. retail.