Tuesday, April 14, 2009

Procter's 2009 raise

Right on schedule, consumer products giant Procter & Gamble (PG) has increased it's dividend by 10% to $0.44/share. I recently bolstered my ownership in Procter back in February, and the company now makes up about 6% of my non-registered portfolio. Always nice to receive a double digit raise in dividend income from a company that is confident about the future.

Here is Procter's recent dividend history;
2004 - $0.98
2005 - $1.09
2006 - $1.21
2007 - $1.36
2008 - $1.55
2009 - $1.72 (estimated)

PG has raised their dividend for 53 straight years. Last year they hiked the pay out by 14%.


Sampson said...

Great stuff MG, I'm slowly adding positions with PG now they've been battered around a little bit. Great to see they truely are recession resistant, still plenty of earnings to pay shareholders.

MG (moneygardener) said...

Yesterdays P/E ratio was less than 13x earnings. By raising the dividend by 10% you might assume that PG believes they can grow earnings at 10% in the near/mid term. If so, this is a great time to buy the stock in my opinion. The P/E should be more like 15-18x.

Sampson said...

The key with PG is that they don't seem to be getting battered in the earnings side. I agree that historically, and given the consistency of this company, a P/E above 15 is warranted.

I find it funny how the talking heads, and traders always say that recessions are the worst times to pick up these companies, but these are the only time they are on sale. When general economic growth picks up again, PG won't appreciate as much, but it still will at a reasonable rate - and now we have a chance to get some great yields-on-cost.