Forget Costco—This Stock Has Made More Millionaires (Part-2)  

This success' secrets? For Procter, consistency matters. Even as economic turmoil lowered the shares, the corporation paid dividends. This led to additional discounted shares, which boosted rebounds.

Another factor is Procter & Gamble's business model and performance. Diapers, toothpaste, and laundry detergent are always needed.

With Tide, Crest, and Pampers, Procter dominates all three categories. This is only a sample. It owns top brands like Dawn dish detergent, Oral-B, and Gillette razors. It leads the market because it can outspend its competitors on marketing, unlike Costco.

Because it can out-promote its competitors, Procter is consistent enough to be worth reinvesting dividends in.

This does not mean you must buy P&G over Costco. Costco is an excellent buy. True, the stock is up over 50% in the past year and over 200% over the prior five. P&G shares aren't performing too well. That large Costco increase may be an aberration, not the norm.

It's unlikely to last. The stock's forward-looking price/earnings ratio is 46, which is high for a retailer. A large drop may be coming when the market reconsiders this run-up. Procter & Gamble shares, valued at 25 times this year's estimated per-share profits, are less risky.

P&G has created more millionaires than Costco because investors can firmly keep onto it in good times and bad, but Costco's volatility makes it hard to stick with. A stock is typically most crucial to hold when it's uncomfortable.

The conclusion? You can become a millionaire without owning beautiful growth stocks. Boring, solid names work just as well, if not better. Additionally, the qualities that made Procter & Gamble a millionaire-maker for 40 years could do it again. People will always need to clean their teeth and do laundry.

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