Procter & Gamble Company (PG) offers branded packaged goods to consumers in North and Latin America, Europe, Asia Pacific, Greater China, India, the Middle East and Africa. It operates in five segments: beauty; Maintenance; Health care; Fabric & home care; and baby, women and family care.

The company increased its quarterly dividend 10% to 86.98 cents / share. This dividend hike marks the 65th consecutive year this dividend king has increased its dividend. The new quarterly dividend of 86.98 cents / share is almost exactly 10% above the previous dividend of 79.07 cents / share. Fractions make it possible to achieve even percentage dividend increases.

Over the past decade, the company has managed to increase its dividend by 5.20% on an annualized basis.

Source: press release

There are only 29 dividend kings in the US. These are companies that have managed to increase their annual dividends every year for at least 50 consecutive years.

This is also the 131st year in a row that P&G has paid a dividend since it was founded in 1890. The dividend shows the company’s commitment to rewarding long-term shareholders with cash dividends. The track record is undoubtedly testament to the resilience of P & G’s business model and the fact that it is relatively resilient to recessions. Not even Covid-19 could disrupt dividend growth for this dividend king!

The company is projected to generate earnings of $ 5.70 per share in 2021. However, the core business is very stable, so that long-term profitability should not be impaired. Based on the forward earnings, the payout ratio appears to be a little under 61%, which means the dividend is sustainable.

I applaud this dividend increase, which is surprising in its size.

For a long time, I didn’t like the fact that earnings per share haven’t gone anywhere since hitting a high of $ 4.26 / share in 2009. This has limited dividend growth. As a result, I was the majority owner of the stock and haven’t added to my position since perhaps the first half of the 2010s.

However, the company earned $ 4.96 / share in 2020 and is expected to make $ 5.70 / share in 2021. It looks like a turnaround is indeed in place, and long-term patient stockholders are now getting higher dividend paychecks.


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