Should I Buy Stock in Dividend Giants Like AT&T and Pfizer? - Ask a Fool

TL;DR

Proctor & Gamble, AT&T, and Pfizer are dividend stocks on the Dow Jones Industrial Average, but their growth opportunities differ.

Transcript

hey fools Austin Smith here and as part of our ask a fool video series I'm going to be responding to users questions pulled from Facebook and Twitter up today we have one from Jessica Densmore who asks I'm interested in Proctor and Gamble AT&T and fizer are these stocks worth holding on to anymore well first off Jessica thank you very much for the ... Read More

Key Insights

• ❓ Proctor & Gamble, AT&T, and Pfizer are all dividend stocks on the Dow Jones Industrial Average, known for their stability.
• ✋ The growth potential of these stocks may be limited due to their size and high valuation.
• 🚨 Unilever is favored over Proctor & Gamble for its better growth prospects and presence in emerging markets.
• 🥹 Pfizer is recognized for its strong pipeline of drugs and significant cash holdings.
• 🙈 AT&T may be limited in growth due to its duopoly structure and is seen as offering less growth potential compared to Apple.
• 🥶 Older investors seeking stability may find these stocks attractive for their dividends.
• ✋ Younger investors seeking higher growth opportunities may need to look beyond these stocks.

Questions & Answers

Q: Are Proctor & Gamble, AT&T, and Pfizer good stocks to hold onto?

It depends on your investment purpose. If you seek steady income and don't want to actively manage your portfolio, these stocks are great. However, if you're a younger investor looking for growth, it could be hard to achieve from these already large and richly priced companies.

Q: How does Proctor & Gamble compare to Unilever?

Proctor & Gamble's volume growth is only 2% and relies heavily on internal price cutting for earnings growth. Comparatively, Unilever offers similar valuation and dividends, but with better organic growth and presence in emerging markets.

Q: What are the key strengths of Pfizer?

Pfizer has a huge moat, strong return on invested capital, a robust pipeline of drugs, and substantial cash. It is the largest company in the healthcare space. While not the author's area of expertise, it is regarded as a solid investment.

Q: Is AT&T a good investment option?

AT&T offers a solid dividend but may lack growth opportunities due to its duopoly structure with Verizon. Apple, on the other hand, is seen as a better investment with more growth potential and lower valuation.

Summary & Key Takeaways

• Proctor & Gamble, AT&T, and Pfizer are all dividend players on the Dow Jones Industrial Average, paying dividends of 3%, 4.9%, and 3.3% respectively.

• These companies are similar on a fundamental level, being large, high-quality, blue-chip companies with strong balance sheets.

• Whether these stocks are worth holding onto depends on the investor's purpose, with younger investors seeking growth opportunities and older investors looking for stability.