Procter & Gamble: Dividends Since 1890

05/15/2014 8:00 am EST


Charles Carlson

Editor, DRIP Investor

Our latest featured stock has few peers when it comes to its dividend; it's recent increase represents the 58th consecutive year the company has boosted its payout and the 124th consecutive year it has paid a dividend since 1890, explains Chuck Carlson, editor of DRIP Investor.

Procter & Gamble (PG) boosted its dividend 7% to a quarterly rate of $0.6436 per share, payable May 15. The dividend boost pushes the yield on these shares to 3.1%.

The dividend hike comes at an opportune time for the company, as investors' attention has returned to big dividend payers. Procter & Gamble has lagged the overall market over the last year, as investors had been more focused on growth names.

The firm is taking some measures to improve its profile with investors. The company recently announced that it has agreed to sell a significant portion of its pet food business to Mars for nearly $3 billion in cash. The deal includes P&G's IAMS, Eukanuba, and Natura brands.

The deal is expected to close in the second half of the year. The company states the move will allow it to focus on its core businesses. It's possible investors will see further rationalization of the company's broad product lines over the next 12 months.

To be sure, at the end of the day it will be revenue and earnings growth that investors want, and P&G has had some problems delivering growth, especially on the top line.

However, there seems to be a heightened sense of urgency at the company to improve its business, an urgency that could be driven, in part, by the increased investor activism that has been felt by consumer-products companies.

I have owned P&G for many years and have seen the company and stock go through slow periods. Fortunately, the shares have always rebounded, and I'm banking on that happening here as well.

Meanwhile, the good news is that my payment for waiting for a stock rebound just went up with the dividend bump.

The company's direct-purchase plan has a minimum initial investment of $250. Subsequent investments are a minimum $50. There is no enrollment fee. Purchase fees are $2.50 plus $0.02 per share. Selling costs are $15 ($5 with online sales requests) plus $0.12 per share.

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