Nelson Peltz Eyes Procter & Gamble

02/27/2017 7:00 am EST


Charles Carlson

Editor, DRIP Investor

Procter & Gamble (PG) is one of my oldest holdings. I first bought these shares roughly 25 years ago and have added to them via optional investments and reinvested dividends, explains dividend expert Chuck Carlson, editor of DRIP Investor.

The performance of the stock over the last quarter-century has been decent, especially when you consider the dividend flow over that time.

Indeed, P&G has boosted its annual divided for 60 consecutive years, one of the longest such streaks of any publicly traded company.

It hasn’t always been rainbows and puppies for P&G shareholders, however, as the stock has had periods of lackluster returns. In recent years, P&G has had difficulty providing the sort of revenue growth that Wall Street wants.

There has been a big push in the last five years among activist investors getting involved in companies that are underperforming, and big consumer-products companies have not been shielded from activist investors.

One activist investing firm, Nelson Peltz’s hedge fund, Trian Fund Management, has been especially active in investing in big consumer-product companies that have had growth issues.

Interestingly, Trian has an investment in Procter & Gamble of more than $3 billion, which may be the single largest investment Trian has ever made.

The news of the stake put a move into Procter & Gamble stock, pushing these shares above $90 and close to an all-time high.

It will be interesting to see how this all pans out for P&G and its shareholders. Trian has had a fair amount of success cajoling and pushing for changes at other consumer-products companies.

Given the stock’s recent pop on news of Trian’s investment, Wall Street seems to think there is a probability that Peltz can help jumpstart P&G shares.

The good news is that investors get paid a dividend yield of nearly 3% while waiting for a turnaround in the stock.

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