The P&G (NYSE: PG) Investor’s Guide


Procter & Gamble (NYSE: PG) is a well-known name in multinational consumer goods. Its product line includes, pet foods, personal care products and cleaning agents. Not long ago, food and beverages was also part of its product category. This year in August, the company announced that it is dropping 100 brands and is shifting focus to its top 80 brands, which bring in 95% of the profit. Officials at P&G (NYSE: PG) described this as a move that allows company to deal with easier to handle brands. The management has big plans in the pipeline, as to how it’s going to handle the existing brands and high hopes are attached with these names. It’s important that investors understand the 4 most important elements about Procter & Gamble (NYSE: PG) that make it a success story.

  1. For 124 years Proctor & Gamble have paid high dividends to investors, which make up part of their success in the long run. Only three other companies have done better this, which include Stanley Works (NYSE:SWK), ExxonMobil (NYSE:XOM) and Consolidated Edison (NYSE:ED). The company has been able to raise its dividend yield for 58 consecutive years. This is why it’s so popular among consumers and investors. For the past ten years the dividend yield stood between 2.5% to 4.5%.
  2. Recent Duracell spinoff was a surprise for many, and the company hasn’t given a justification behind this move. But the overall opinion is that the separation won’t affect the shareholder returns, and to many, that’s all that matters. Analysts believe it’s a tax-efficient way to allow parent company to redeem its shares. But Duracell itself is a strong brand, a multimillion dollar one and the separation should affect either company’s dividend shares.
  3. If that wasn’t enough P&G (NYSE: PG) is working towards enhancing and sustaining future dividend growth. This is done in order to clear any doubt that shareholders might have, especially after the recent suspended dividend payment of Sony (NYSE:SNE) last month after 56 consecutive years. Duracell is just another name among the 100 brands that P&G (NYSE: PG) dropped this year. The investors have to understand that just because P&G (NYSE: PG) had many billion dollar brands to its name doesn’t mean they were all profitable. Duracell, even though, brought in about $2.5 billion in the past few years, the company showed no potential for growth and hence had to be cut off. Other names slashed out didn’t go in line with the company’s core mission.
  4. P&G (NYSE: PG) missed out on quality batteries in mobile communications which could have promised future growth and high figures. But there are still many segments to cater too which will help P&G (NYSE: PG) reach its optimal size.

Regardless of the recent changes, P&G (NYSE: PG) still has much to offer its dividend investors. These moves have only shown that the company knows how to maintain a balance between growing dividends and cutting off those that show no potential in the long run to offer that.