Income investors typically look for stocks with high yields to add to their portfolios. That’s fine if you need strong cash flow right now. 

But those with a longer time horizon should consider companies with a more modest current yield but a history of annual dividend increases. This month’s Top Pick falls into that category.

Cincinnati-based Procter & Gamble (PG) is a giant in the cleaning products business as well as personal health care and grooming. The odds are your bathroom, kitchen, and laundry are stocked with P&G products.

The long list of brands includes Tide, Bounce, Pampers, Downy, Bounty, Charmin, Always, Tampax, Gillette, Head & Shoulders, Herbal Essences, Old Spice, Pantene, Cascade, Febreze, Oral-B, Mr. Clean, Crest, Scope, Vicks, Ivory, and Secret.

And that’s just scratching the surface. How many of these products do you buy regularly? P&G supplies products that people need no matter what’s going on in the world: toilet paper; soap; feminine hygiene; toothpaste; diapers — there will always be a demand for these things. This makes the company relatively recession-proof.

The stock will dip during market plunges, but it always recovers and moves on to new highs. That provides stability for your portfolio. From an income perspective, the company has a long history of annual dividend increases, going all the way back to 1988.

P&G just recently reported results for the second quarter of its 2021 fiscal year, covering the three months to Dec. 31. Net sales for the period were $19.7 billion, an increase of 8% over the prior year. Diluted net earnings per share were $1.47, an increase of 4% year-over-year.

P&G raised its sales growth outlook for fiscal 2021 from a range of 3%-4% to a range of 5%-6% over the prior fiscal year. The company said it now expects fiscal 2021 GAAP diluted net earnings per share growth in the range of 8%-10%.

The share price may decline in times of market dips. That happened last March, when it fell as low as $94.34. Based on the history of the stock, those occurrences should be treated as buying opportunities.

The stock currently pays a quarterly dividend of $0.7907 ($3.1628 per year) to yield 2.4% at the current price. Based on past history, we should expect an increase with the April payment.

The company is also buying back stock. In the latest quarter, P&G spent $3 billion on share repurchases. For fiscal 2021, the company expects to spend a total of $9-$10 billion on buybacks.

P&G is suitable for those looking for a stable U.S. equity with a modest but steadily increasing dividend payment. This is a core stock for the U.S. segment of an income portfolio. The company has been in business for 180 years and will probably still be filling grocery shelves with its products 180 years from now.