Erin Lash: Within the consumer products landscape, we think investors should consider initiating a position in Procter & Gamble (PG). It's a wide-moat name with an attractive valuation. Last quarter, P&G announced that it would be shutting more than half of its brand portfolio. And while this might sound significant, these brands have been underperforming from both a top-line as well as a profitability perspective over the last several years.
We think that focusing their resources on the highest return opportunities will ultimately enable them to be more responsive to consumer trends in this highly competitive environment. Further, we don't think that this inhibits the firm's scale advantages to any regard, given that the brands that they are continuing to operate make up the bulk of their sales and profitability.
In addition, P&G is committed to returning excess cash to shareholders through its dividend payments, increasing the total return that shareholders are poised to receive. Given the attractive valuation, we think investors should take a closer look at this wide-moat name.