Strategies for Capitalizing on Current Tax-Loss Selling to Acquire Quality Stocks at a Discount
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Nov 18 2025
0mins
Source: CNBC
Tax-Loss Harvesting: The annual tax-loss harvesting is underway, with advisors selling stocks at a loss to offset gains from earlier in the year, leading to significant market activity and potential distortions in stock valuations.
Opportunities in Quality Stocks: Despite the trend of selling off underperforming stocks, there may be opportunities to acquire quality companies at lower prices, particularly those with strong fundamentals and dividends, such as IBM and other "Dogs of the Dow."
Market Dynamics: The current market environment is characterized by forced selling due to tax reasons, which can create inefficiencies and present buying opportunities for disciplined investors looking for undervalued stocks.
Focus on Long-Term Value: Investors are encouraged to look beyond short-term market fluctuations and consider long-term potential in companies that are experiencing temporary setbacks, particularly those with solid financials and growth prospects in emerging sectors like AI.
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Analyst Views on PG
Wall Street analysts forecast PG stock price to rise
17 Analyst Rating
10 Buy
7 Hold
0 Sell
Moderate Buy
Current: 143.400
Low
150.00
Averages
164.50
High
180.00
Current: 143.400
Low
150.00
Averages
164.50
High
180.00
About PG
The Procter & Gamble Company is focused on providing branded consumer packaged goods to consumers across the world. The Company’s segments include Beauty, Grooming, Health Care, Fabric & Home Care and Baby, Feminine & Family Care. The Company’s products are sold in approximately 180 countries and territories primarily through mass merchandisers, e-commerce, including social commerce channels, grocery stores, membership club stores, drug stores, department stores, distributors, wholesalers, specialty beauty stores, including airport duty-free stores), high-frequency stores, pharmacies, electronics stores and professional channels. It also sells direct to individual consumers. It has operations in approximately 70 countries. It offers products under brands, such as Head & Shoulders, Herbal Essences, Pantene, Rejoice, Olay, Old Spice, Safeguard, Secret, SK-II, Braun, Gillette, Venus, Crest, Oral-B, Ariel, Downy, Gain, Tide, Always, Always Discreet, Tampax, Bounty and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Comparing Dividend Kings: Procter & Gamble vs. Johnson & Johnson
- Dividend King Criteria: To be classified as a Dividend King, a company must increase its dividend for at least 50 consecutive years, a standard that highlights the ability of firms like Procter & Gamble and Johnson & Johnson to maintain stability through economic fluctuations, showcasing their robust business models and brand loyalty.
- Procter & Gamble's Market Position: With a market cap of $336 billion and a dividend yield of 2.95%, Procter & Gamble is considered a solid investment choice despite its valuation metrics being below five-year averages, particularly as consumer demand for essentials remains consistent amid economic uncertainty.
- Johnson & Johnson's Competitive Edge: Johnson & Johnson boasts a market cap of $564 billion and a 5.7% annual dividend growth rate, benefiting from patent protections in its pharmaceutical and medical device sectors, which ensures stable revenue streams even during economic downturns, reinforcing its leadership in the healthcare industry.
- Legal Risks and Market Opportunities: While Johnson & Johnson faces legal challenges related to talcum powder, its diversified business model and ongoing investment in research and development position it well to navigate market uncertainties, further solidifying its status as a Dividend King.
See More
Johnson & Johnson: A Strong Dividend King Investment
- Stable Dividend Growth: Johnson & Johnson has increased its dividend annually for 50 consecutive years, with an average growth rate of 5.7%, demonstrating a robust business model and adaptability in the face of economic uncertainty, which attracts long-term investor interest.
- Strong Demand for Medical Products: J&J's medical and pharmaceutical products benefit from patent protections, ensuring its market position in healthcare, as consumers have little choice when it comes to necessary medical services, thereby enhancing revenue stability and risk resilience.
- Relative Valuation Analysis: Although J&J's valuation metrics are above its five-year averages, its dividend yield exceeds 2.2%, double that of the broader market, indicating that investors are willing to pay a premium for its diversified and resilient business in the current market environment.
- Legal Risk Consideration: J&J faces legal challenges related to talcum powder, which may concern some investors; however, the management's ability to address these issues could further validate the company's fundamental strength and capacity to navigate adversity.
See More
Year-End Investment Strategies and Tax Planning
- Focus on Winning Stocks: For instance, Alphabet (GOOG) has more than doubled in value over the past year, which may lead to it occupying a larger portion of an investor's portfolio, thus taking profits before year-end can mitigate risks and allow for better capital gains tax planning.
- Tax Loss Harvesting Strategy: With NuScale Power (SMR) shares down 50%, investors can sell at a loss to offset gains from other profitable stocks, effectively reducing tax liabilities while avoiding emotional decision-making and promoting rational investment strategies.
- Cash Reallocation: After trimming profits and harvesting losses, investors may find cash in their accounts, providing opportunities to buy new stocks or increase positions in existing investments, especially if certain companies have strong narratives that the market has yet to recognize, potentially leading to future gains.
- Portfolio Maintenance: Investors should regularly review their portfolios to ensure alignment with long-term investment goals, avoiding last-minute decisions before year-end, and it is advisable to conduct portfolio maintenance monthly or quarterly to keep investments orderly and effective.
See More
Direct Indexing Strategy Boosts Retirement Income Potential
- Income Potential: A 65-year-old couple can generate approximately $19,000 annually from a $700,000 investment portfolio using a direct indexing strategy, which combines dividends and tax-loss harvesting, highlighting the strategy's effectiveness and appeal.
- Dividend Composition: Supported by major dividend payers like Johnson & Johnson (JNJ), Procter & Gamble (PG), Coca-Cola (KO), Exxon Mobil (XOM), and Microsoft (MSFT), the dividend yield is around 2.0%, providing investors with a stable cash flow.
- Tax-Loss Harvesting Advantage: The direct indexing strategy allows for selling individual stocks that decline, utilizing harvested losses to offset capital gains, with expected annual increases in after-tax returns of 0.5% to 1.5%, further enhancing overall portfolio returns.
- Portfolio Flexibility: This strategy enables investors to manage their portfolios flexibly while maintaining market exposure, optimizing returns through market volatility, thereby achieving higher capital appreciation and income growth over the long term.
See More
Stable Dividend Growth in Consumer Staples Stocks
- Coca-Cola's Dividend Growth: Coca-Cola approved its 64th consecutive annual dividend increase in February, raising the annual payout from $2.04 to $2.12 per share, demonstrating strong pricing power and high gross margins despite modest growth risks in developed markets.
- Procter & Gamble's Consistency: Procter & Gamble declared its 69th consecutive annual dividend increase in April, supported by a portfolio of leading brands across various categories, ensuring over 130 years of dividend payments and showcasing predictable free cash flow and ongoing investment capabilities.
- Colgate's Resilience: Colgate raised its quarterly dividend in March, continuing a long streak of payout growth, benefiting from its strong market position in oral care and growth potential in emerging markets, which helps it adapt to economic fluctuations.
- Walmart's Advertising Revenue: Walmart extended its dividend growth streak to 53 years in February, increasing its quarterly payout to $0.248 per share; while the yield is modest, its advertising business generates approximately $6.4 billion in revenue, indicating strong operating leverage and sustained market competitiveness.
See More
Reliable Dividend Growth in Consumer Staples
- Coca-Cola's Sustained Growth: The Coca-Cola Company approved its 64th consecutive annual dividend increase in February, raising the annual payout from $2.04 to $2.12 per share, reflecting its strong pricing power and high gross margins within a global network of independent bottlers, despite modest volume growth in developed markets.
- Procter & Gamble's Cash Flow Stability: Procter & Gamble declared its 69th consecutive annual dividend increase in April, supported by a portfolio of leading brands across various categories, ensuring predictable free cash flow that covers dividends, buybacks, and product development funding needs.
- Colgate's Resilience: Colgate-Palmolive raised its quarterly dividend in March, benefiting from the recession-resistant nature of toothpaste and oral care products, while its exposure to emerging markets provides volume growth advantages over mature U.S. competitors.
- Walmart's Advertising Revenue Growth: Walmart extended its dividend growth streak to 53 years in February, increasing its quarterly payout to $0.248 per share, with its advertising business generating approximately $6.4 billion in revenue, showcasing operational leverage and success in its membership program.
See More
Comparing Dividend Kings: Procter & Gamble vs. Johnson & Johnson
- Dividend King Criteria: To be classified as a Dividend King, a company must increase its dividend for at least 50 consecutive years, a standard that highlights the ability of firms like Procter & Gamble and Johnson & Johnson to maintain stability through economic fluctuations, showcasing their robust business models and brand loyalty.
- Procter & Gamble's Market Position: With a market cap of $336 billion and a dividend yield of 2.95%, Procter & Gamble is considered a solid investment choice despite its valuation metrics being below five-year averages, particularly as consumer demand for essentials remains consistent amid economic uncertainty.
- Johnson & Johnson's Competitive Edge: Johnson & Johnson boasts a market cap of $564 billion and a 5.7% annual dividend growth rate, benefiting from patent protections in its pharmaceutical and medical device sectors, which ensures stable revenue streams even during economic downturns, reinforcing its leadership in the healthcare industry.
- Legal Risks and Market Opportunities: While Johnson & Johnson faces legal challenges related to talcum powder, its diversified business model and ongoing investment in research and development position it well to navigate market uncertainties, further solidifying its status as a Dividend King.
See More
Johnson & Johnson: A Strong Dividend King Investment
- Stable Dividend Growth: Johnson & Johnson has increased its dividend annually for 50 consecutive years, with an average growth rate of 5.7%, demonstrating a robust business model and adaptability in the face of economic uncertainty, which attracts long-term investor interest.
- Strong Demand for Medical Products: J&J's medical and pharmaceutical products benefit from patent protections, ensuring its market position in healthcare, as consumers have little choice when it comes to necessary medical services, thereby enhancing revenue stability and risk resilience.
- Relative Valuation Analysis: Although J&J's valuation metrics are above its five-year averages, its dividend yield exceeds 2.2%, double that of the broader market, indicating that investors are willing to pay a premium for its diversified and resilient business in the current market environment.
- Legal Risk Consideration: J&J faces legal challenges related to talcum powder, which may concern some investors; however, the management's ability to address these issues could further validate the company's fundamental strength and capacity to navigate adversity.
See More
Year-End Investment Strategies and Tax Planning
- Focus on Winning Stocks: For instance, Alphabet (GOOG) has more than doubled in value over the past year, which may lead to it occupying a larger portion of an investor's portfolio, thus taking profits before year-end can mitigate risks and allow for better capital gains tax planning.
- Tax Loss Harvesting Strategy: With NuScale Power (SMR) shares down 50%, investors can sell at a loss to offset gains from other profitable stocks, effectively reducing tax liabilities while avoiding emotional decision-making and promoting rational investment strategies.
- Cash Reallocation: After trimming profits and harvesting losses, investors may find cash in their accounts, providing opportunities to buy new stocks or increase positions in existing investments, especially if certain companies have strong narratives that the market has yet to recognize, potentially leading to future gains.
- Portfolio Maintenance: Investors should regularly review their portfolios to ensure alignment with long-term investment goals, avoiding last-minute decisions before year-end, and it is advisable to conduct portfolio maintenance monthly or quarterly to keep investments orderly and effective.
See More
Direct Indexing Strategy Boosts Retirement Income Potential
- Income Potential: A 65-year-old couple can generate approximately $19,000 annually from a $700,000 investment portfolio using a direct indexing strategy, which combines dividends and tax-loss harvesting, highlighting the strategy's effectiveness and appeal.
- Dividend Composition: Supported by major dividend payers like Johnson & Johnson (JNJ), Procter & Gamble (PG), Coca-Cola (KO), Exxon Mobil (XOM), and Microsoft (MSFT), the dividend yield is around 2.0%, providing investors with a stable cash flow.
- Tax-Loss Harvesting Advantage: The direct indexing strategy allows for selling individual stocks that decline, utilizing harvested losses to offset capital gains, with expected annual increases in after-tax returns of 0.5% to 1.5%, further enhancing overall portfolio returns.
- Portfolio Flexibility: This strategy enables investors to manage their portfolios flexibly while maintaining market exposure, optimizing returns through market volatility, thereby achieving higher capital appreciation and income growth over the long term.
See More
Stable Dividend Growth in Consumer Staples Stocks
- Coca-Cola's Dividend Growth: Coca-Cola approved its 64th consecutive annual dividend increase in February, raising the annual payout from $2.04 to $2.12 per share, demonstrating strong pricing power and high gross margins despite modest growth risks in developed markets.
- Procter & Gamble's Consistency: Procter & Gamble declared its 69th consecutive annual dividend increase in April, supported by a portfolio of leading brands across various categories, ensuring over 130 years of dividend payments and showcasing predictable free cash flow and ongoing investment capabilities.
- Colgate's Resilience: Colgate raised its quarterly dividend in March, continuing a long streak of payout growth, benefiting from its strong market position in oral care and growth potential in emerging markets, which helps it adapt to economic fluctuations.
- Walmart's Advertising Revenue: Walmart extended its dividend growth streak to 53 years in February, increasing its quarterly payout to $0.248 per share; while the yield is modest, its advertising business generates approximately $6.4 billion in revenue, indicating strong operating leverage and sustained market competitiveness.
See More
Reliable Dividend Growth in Consumer Staples
- Coca-Cola's Sustained Growth: The Coca-Cola Company approved its 64th consecutive annual dividend increase in February, raising the annual payout from $2.04 to $2.12 per share, reflecting its strong pricing power and high gross margins within a global network of independent bottlers, despite modest volume growth in developed markets.
- Procter & Gamble's Cash Flow Stability: Procter & Gamble declared its 69th consecutive annual dividend increase in April, supported by a portfolio of leading brands across various categories, ensuring predictable free cash flow that covers dividends, buybacks, and product development funding needs.
- Colgate's Resilience: Colgate-Palmolive raised its quarterly dividend in March, benefiting from the recession-resistant nature of toothpaste and oral care products, while its exposure to emerging markets provides volume growth advantages over mature U.S. competitors.
- Walmart's Advertising Revenue Growth: Walmart extended its dividend growth streak to 53 years in February, increasing its quarterly payout to $0.248 per share, with its advertising business generating approximately $6.4 billion in revenue, showcasing operational leverage and success in its membership program.
See More
