Defensive Stocks: Coke And Procter & Gamble

Today, I’ll continue my coverage of defensive stocks with Coca-Cola and Procter & Gamble.

Coca-Cola (Ticker: KO) was founded in 1886 and is headquartered in Atlanta, Georgia. Coca-Cola offers over 3,000 beverages and its brands include Sprite, Fanta, A&W and Hi-C. In its last fiscal year, Coca-Cola brought in $31.9 billion in sales.

Photo by poolie, courtesy of flickr

In the past two years, Coca-Cola’s stock price is down about 9 percent. However, KO paid dividends of $3.02 per share, which really puts the stock at a loss of less than 4 percent. 

KO is in the red for the 2-year holding period, but it still outperformed the Dow and the S&P 500 easily. Both lost about 30 percent for the same period.  Coca-Cola is a component in both indices. (View the 2-year chart of  KO vs. the Dow and the S&P 500)

Procter & Gamble (Ticker: PG) provides consumer goods worldwide. Some of its most popular brands include Duracell, Charmin, Gillette and Crest. P&G was founded in 1837 and headquartered in Cincinnati, Ohio.

The stock is included in the Dow and the S&P 500, and has outperformed them both by a sizeable margin. PG is down 18.5 percent versus a 30 percent loss for the Dow and the S&P 500 for the same period. 

But, during the two year period, PG paid dividends of $3.18 per share, so the investment lost about 14 percent of its value. (View the 2-year chart of PG vs. the Dow and the S&P 500)

For the first time this week, we have two stocks in negative territory. They are by no means bad stocks, but they both have negative returns for the two-year holding period. Even though both stocks lost value, they lost far less value than an investment in any of the major indices for the same period. So it looks like they are decent defensive plays after all.

Tomorrow, I’ll wrap up the defensive stock review with Pepsico and Merck.