In the face of market downturns, investors often go defensive and seek out consumer staples for a source of stability in their portfolios. That might be why Procter & Gamble PG is such an investor darling. But in this economic environment marked by major inflation, it's another story for almost any company attached to any supply chain.
While the demand for disinfectant and cleaning products made for memorable events a couple of years ago, sector director Erin Lash says that today the company still faces lingering supply chain issues, labor shortages, and unrelenting commodity cost inflation. Investors may be underestimating some near-term headwinds at Procter & Gamble, as they value the company's wide moat and commitment to innovation and quality that commands premium prices. But what matters most is the cost and what shareholders pay for it.
For Morningstar, I'm Andrew Willis.
Check out Morningstar.ca to watch Why Is Tencent So Cheap?