Dividends in Focus: The Procter & Gamble Company (PG)

Dividends in Focus: The Procter & Gamble Company (PG)


Shares of consumer products maker Procter & Gamble (PG) had a solid 2013, gaining over 20%. Let’s take a look at what’s in store for the company in 2014, along with what investors can expect from a dividend standpoint.

Procter & Gamble’s Current Dividend Policy

P&G pays a quarterly dividend of 60.15 cents per share, or $2.41 on an annualized basis, and its yield currently sits just under the 3% level. The company is a member of an elite group of stocks that have raised their dividends each year for over 50 years, and 2013 saw a 7% payout boost. This move mirrored the company’s 7% raise in 2012. With a 2013 payout ratio of 56% and an expected 2014 payout ratio under 52%, the company has plenty of room to raise its dividend for a 58th consecutive year.

Dividend.com DARS Ratings for Procter & Gamble

Overall Rating:Neutral (3.4/5)

Metric Rating Explanation
Relative Strength Stock is performing in-line with the market or better.
Overall Yield Attractiveness Stock’s dividend yield is adequate.
Dividend Reliability This rating is related to the length and consistency of a company’s dividend payouts, as well as our opinion on how likely the company is to continue payouts in the future.
Dividend Uptrend Dividend payouts are consistent, but increases small.
Earnings Growth Earnings estimates have been cut slightly.

The Bottom Line

There’s a lot to like about Procter & Gamble. The company’s dividend history is almost unmatched, its long-term chart looks great, it owns many fantastic consumer product brands, and it boasts a strong management team. Although the stock’s valuation is a bit rich at 18x 2014 estimates, it should prove to be a great target on pullbacks. Plus, should the wider market see a sustained decline, you can bet that many investors will target P&G as a safe haven pick.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.