Wednesday, March 17, 1999
P&G has helped drive index
BY RANDY TUCKER
The Cincinnati Enquirer
As one of the leading components of the Dow Jones Industrial Average, Procter & Gamble has been instrumental in driving the index for decades.
The Cincinnati consumer-products giant, which was added to the stock index in May 1932, closed Tuesday at $91.933/4, up 25 cents for the day and helping to boost the Dow's overall average.
Dick Toful, a spokesman for the Dow, says P&G stands out because of its longevity on the Dow, which was founded in 1896.
In Mr. Toful's opinion, P&G has remained on the index for nearly 67 years because of its broad scope.
“In constructing an average of stocks, one wants to be broadly representative of the market and broadly representative of the economy,” Mr. Toful said.
The editors of The Wall Street Journal decide which companies will make up the index.
Mr. Toful said he thinks their judgment is based in large part on the editors' perception of a company's impact on the economy.
That's why five-and-dime retailer Woolworth Corp., for example, was dropped from the index several years ago, he said.
“Woolworth's business had become a thing of the past, and they had become a less significant force in the economy,” Mr. Toful said.
If the continued demand for P&G products is any indication of its relevance to the economy, the company — with worldwide revenues of more than $37 billion a year — probably doesn't have to worry about meeting the same fate as Woolworth.
Many of the company's most popular brands today, including Ivory, Crisco and Camay, were also big sellers for P&G when it joined the Dow.
At the time — during the Great Depression — P&G's share price had dropped from a high of $68.25 in May 1931 to a monthly trading range of between $26 and $32 a year later.
But at that price, P&G proved to be a phenomenal investment.
According to the company, $100 invested in P&G stock in May 1932 was worth about $453,446 at the end of February this year, including stock splits and dividend reinvestment.
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