Consistency is valuable. A company that increases its profits by 10% every year is usually more attractive than a company that increases earnings 20% in some years and 0% in others. You know what you are getting as an investor, and there is less risk of price swings if short-term results don't meet expectations.
Procter & Gamble gets high marks for consistency--or at least it did until recently. Its year-on-year growth in both revenues and earnings have ranged only a couple of percentage points in either direction from its three-year averages. That's remarkably consistent. However, note that P&G's earnings growth has been slowing down, from 16% in 1996 to 9% in 1999 (excluding a one-time charge). In March 2000, the company announced that its earnings for the year would fall far short of expectations, and its stock price plunged. That's what happens when a usually consistent performer like P&G stumbles.
Does the Company Generate a Dependable Stream of Free Cash Flow? >>