Jim Cramer has multiple reasons to like Procter & Gamble , even as the consumer packaged goods sector remains out of favor. “Procter is my favorite stock,” Jim said Tuesday during the Morning Meeting for Investing Club members, pointing to what he described as an increasingly attractive setup for long-term investors. For starters, P & G stock is cheap. While shares have dropped 10.5% year-to-date, Jim sees opportunity. With a price-to-earnings ratio of just over 20 times next 12-month estimates, Jim said P & G is trading at one of the least expensive multiples he remembers seeing for the company behind Tide, Crest, Gillette, and dozens upon dozens of other brands. P & G is also getting a new CEO in January. Company veteran Shailesh Jejurikar, promoted from chief operating officer, is expected to “clean house,” according to Jim, in a restructuring plan to accelerate sales and reinvigorate the business. “You want to be in [the stock] on the ground floor of a new CEO at Procter & Gamble,” Jim said during the Club’s December Monthly Meeting , suggesting Jejurikar’s strategies to turn around the company should translate to a higher stock price. PG YTD mountain PG stock performance YTD. To be sure, things may get worse before they get better. During P & G’s fiscal 2026 first-quarter earnings call on Oct. 24, management already told investors it is going to miss the next quarter, saying it will be the “softest growth quarter for the year.” The team added that stronger growth is expected in the back half of fiscal 2026. If that scenario were to play out, Jim thinks the stock may do nothing. But if the upcoming quarter isn’t as bad as feared, “then the stock will take off, and it’s never going to look back,” he explained during the Monthly Meeting. Jim’s conviction stems from P & G’s strong historical track record. Fiscal Q1 marked the 40 th consecutive quarter of organic sales growth, which kept the business on track for its 10 th straight year of core earnings per share (EPS) growth. That fundamental business strength is a core reason why we initiated a position in the company last month. We made our most recent buy earlier this month after Procter & Gamble CFO Andre Schulten described the U.S. market as the “most volatile we’ve seen in a long time.” As Jeff Marks, director of portfolio analysis for the Club, wrote in our Dec. 2 trade alert: “If there is a silver lining to this downbeat news, it’s that Schulten said a tougher U.S. backdrop is already factored within the guidance range the company previously provided when P & G reported its fiscal 2026 first-quarter results in October. Over fiscal 2026, the company expects organic sales growth in the range of flat to up 4% versus the prior year and core earnings per share growth of flat to up 4% year over year.” The economic backdrop could also turn into a tailwind. While P & G can perform in all kinds of macro environments because its products are used daily, lower borrowing costs and sinking oil prices, which lead to lower gas prices, directly help consumers feel more flush. A weak dollar, meanwhile, makes P & G’s products more competitive overseas. With these forces at work, the stock appears to be de-risking. In the meantime, investors are paid to wait for the tide to turn. Procter & Gamble is considered a dividend aristocrat — a distinction reserved for companies that have increased their dividends every year for the last 25 consecutive years. P & G is at 69 straight years and counting. At current share prices, P & G has an annual dividend yield of about 2.9%. Management is also planning $5 billion worth of share repurchases in fiscal 2026. While packaged goods are a hated category at the moment, Procter & Gamble is still a high-quality, cheap valuation consumer staples name seen as a way to diversify in the current market dominated by the ebbs and flows of the AI trade and just a handful of megacap tech stocks. As Jim said on “Mad Money” on Monday evening, “In this whacky market, you want those who use the technology, not those who make it.” The Club has our buy equivalent 1 rating on P & G shares and a price target of $165 each. (Jim Cramer’s Charitable Trust is long PG. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
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