Procter & Gamble: "A Stock for the Times"

05/05/2020 5:00 am EST

Focus: CONSUMER

Charles Carlson

Editor, DRIP Investor

The coronavirus-driven economic mess will impact the dividend policies of a host of companies, notes dividend reinvestment expert Chuck Carlson, editor of DRIP Investor.

That’s why it was great to see Editor’s Portfolio holding Procter & Gamble (PG) recently announce that it is boosting its dividend 6% to a quarterly rate of $0.7907 per share, payable May 15 to shareholders of record April 24.

It is worth noting that the 6% increase — the largest percentage increase since 2014 — represents the 64th consecutive year that P&G has raised its dividend.

The timing and the size of the increase are noteworthy and point to a company that is confident in its future. Procter & Gamble shares have held up fairly well during the market decline and are down only 5% from their 52-week high of just over $128 per share.

Providing support to these shares are a dividend yield of 2.5% and position as a provider of many of life’s necessities, which have seen increased demand as a result of the national lockdown.

P&G’s stable of popular brand names includes Always, Ariel, Bounty, Charmin, Crest, Dawn, Downy, Febreze, Gain, Gillette, Head & Shoulders, Olay, Oral-B, Pampers, Pantene, Tide, and Vicks.

I have been a long-time owner of P&G stock and am pleased to see the company boosting its dividend. To be sure, the shares are not cheap. The stock trades at 24 times the fiscal 2020 earnings estimate.

However, P&G is a stock for the times, which should help these shares continue to show good price resiliency. There’s a nice bullish story for these shares right now, which should help them outpace the broad market over the next 12 months.

Please note P&G offers a direct purchase plan whereby any investor may buy the first share and every share directly from the company. Minimum initial investment is $250.

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