Finanzas: What Procter & Gamble’s Turnaround Means For Dividend Investors
A dividend aristocrat with a 59-year history of interrupted dividend growth.
Recently, dividend growth has slowed down as competitors have begun eating up P&Gs market share.
The company responds to these challenges by focusing on core brands and cutting cost.
Can P&G return to higher dividend growth in the future?
Procter & Gamble (NYSE:PG) is a stock largely considered to be as close to a bond as possible. The company boasts an impressive dividend track record that has seen consistently increasing dividends every year since 1957. That is 59 years of uninterrupted annual dividend increases.
Investors having gone all the way since the beginning of that illusive dividend track record have earned a fortune in dividends propelled by numerous stock splits in the meantime.
On average, since 1995, PG has increased its dividend by more than 7.5% every year. However, over the last three years that growth has significantly slowed down to a meager 3.6% with the most recent increase only representing a 1% rise.
On the contrary, the stock price has appreciated meaningfully in these last 3 years and thus investors are valuing the stock considerably higher in these meager dividend growth years compared to the 7%+ area. As a result, the current yield is far away from being lofty and the stock far away from being cheap as epitomized by the chart below.
PG is a stock virtually part of every long-term dividend growth portfolio as the company’s business model is straightforward, recession-proof and the company’s products respond to daily needs of millions and millions of consumers.
The company owns an arsenal of brands in the consumer products sector every household needs and wants and has clustered itself into 5 business segments.
Fuente: Seeking Alpha
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