Course 406: Slow-Growth Stocks
Conclusion: What Do I Get in Return?
In this course
1 Introduction
2 How Fast Is the Company Growing?
3 How Consistently Is the Company Growing?
4 Does the Company Generate a Dependable Stream of Free Cash Flow?
5 What's the Company Doing with Its Money?
6 What's the Return on Capital?
7 How Has the Stock Performed?
8 Is the Stock Priced Like a Slow Grower?
9 Conclusion: What Do I Get in Return?

If they compensate for their slow growth by demonstrating other attractions (such as high returns on capital), and if they trade at a reasonable price, slow-growth firms can make sound investments. Procter & Gamble boasts a number of attractions: It generates heaps of cash, it earns higher than average returns on its capital, and its stock has been a very reliable performer. Digging deeper into its numbers reveals some potential causes for concern, though nothing to panic about. Procter & Gamble's earnings growth has been steadily slowing, and its returns on capital, while excellent, have shown signs of strain. Most important, Procter & Gamble is cheaper than it was in 1999--and that's a plus for a slow grower.

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