Is Procter & Gamble One of the Best Dividend Stocks of All Time?


The Procter & Gamble Company (NYSE: PG ) could be an investor’s dream. The company carries some familiar names and brands, including Pampers, Bounce, Dreft, Gain, Tide, Bounty, Braun, Gillette, Old Spice, Swiffer, Dawn and dozens of others.



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The growing popularity of discount retailers offering cheaper store brands has been particularly difficult. Look at the stock price for proof: P&G shares have lost 2% over the past five years compared to a 65% gain for the Dow.

History of the Procter & Gamble Company

Candle maker William Procter and soap maker James Gamble settled in Cincinnati, Ohio and formed Procter & Gamble in 1837. Sales reached $1 million in 1858-1859 with 80 employees. In the 1880s, Procter & Gamble created Ivory soap.

The company, still based in Cincinnati, offered profit sharing to its employees in 1887 and began diversifying its products in 1911, creating Crisco and eventually diversifying its range into soaps, toiletries and products alimentary The company continued to expand and branch out into new areas, creating Tide laundry detergent in 1946 and Prell shampoo in 1947 and fluoride toothpaste (the popular Crest) in 1955. The company bought factories of Charmin paper in 1957 to create toilet paper products, Downy fabric. softening in 1960 and Bounce softening in 1972.

One of its best products was the disposable brand Pampers, which later launched Pampers Pure in 2018, a more environmentally friendly alternative.

Acquisitions over time included:

  • Folgers Coffee
  • Norwich Eaton Pharmaceuticals
  • Richardson-Vicks
  • Noxell
  • Shulton’s Old Spice
  • Maximum factor
  • James Company
  • Pantene
  • Gillette

P&G announced it was dropping about 100 brands, and that included selling Pringles to Kellogg’s, Jif, Crisco and Folger’s to Smucker’s and Iams to Mars Inc.

The company now offers packaged products to consumers worldwide, streamlining its operations across six segments, including beauty, hairdressing, health care, fabric and home care, baby care, women’s and family care.

More information: How to find out the history of dividend stocks

Why P&G is widely regarded as one of the best dividend stocks of all time

Why might you consider Proctor & Gamble one of the best of the best? Let’s take a look at some factors that place it in the category of the best investment ever.

  • Strong brand recognition: Procter & Gamble’s approach of focusing on product specialization and differentiation, building global research facilities, and hiring the best talent in order to build this brand following has cultivated a recognition of amazing brand for decades of business.
  • Ability to constantly raise prices: This year, price hikes took effect on products like Tide detergent and Downy dryer sheets and across segments including health care, baby care, feminine care, adult incontinence, family care, home care, hair care, hair care, oral care and more in the US and international markets. Growth and profitability continue to succeed because loyal Procter & Gamble consumers are willing to pay more for the brands they know and love.
  • Consistent dividend increases: The Dividend King has been paying shareholders a dividend since 1891, offering rewards far beyond what many companies can do. Its current dividend yield is 2.55%, its annual dividend is $3.65, and its dividend payout ratio is 63.70%. The company returned more than $3.4 billion in cash to shareholders through approximately $2.2 billion in dividend payments and $1.2 billion in common share repurchases as reported in the third quarter of 2022. P&G has the resources and the desire to increase dividends without sacrificing growth.
  • Growth and profitability trends: As you can probably guess, Procter & Gamble offers excellent opportunities for continued growth and profitability. The company reported third-quarter fiscal year net sales of $19.4 billion in 2022, up 7% from last year. Organic sales increased 10% (excluding the impact of foreign exchange, acquisitions and divestitures). Net earnings per diluted share were $1.33, an increase of 6%. Operating cash flow was $3.2 billion in the same quarter and adjusted free cash flow yield was 74%.
  • Ability to withstand economic pressure and market downturns: When COVID-19 hit, it was common for investors to turn to tried and true consumer staples. The consumer staples niche typically offers income protection during incredible volatility. If you’re focused on revenue during nail-biting markets, Procter & Gamble has you covered. The company will likely be less sensitive to pinball moves in most markets.

Why you might want to avoid Procter & Gamble

On the other hand, why would you want to leave Procter & Gamble off your list?

  • Competition: Despite its powerful household name and other factors that make Procter & Gamble a consistent investment in favor of the column, it still has significant competitors, including Colgate-Palmolive, Church and Dwight and Unilever. Consumers have a wide variety of smaller companies available to buy from, especially in the organic personal care and other markets.
  • Overwhelming: Procter & Gamble has a large list of brands, and managing its brand portfolio, finding a large number of growth streams, accurately predicting consumer trends and expectations, and continuing to innovate can lead to growth stuck in the future.

Read more: Should You Put Dividend Stocks in Your Roth IRA?

Consider all angles before investing

If Proctor & Gamble were just one of a handful of stocks you could invest in, it would be easy to say, “Yeah, I’ll take that!” However, in a field of infinite possibilities, it is always difficult to determine the way forward.

But there are bright spots for investors. In its fiscal third quarter 2022 earnings report summary, P&G had raised its full-year 2022 sales forecast, showing growing demand for its cleaning and personal care products despite price increases .

Overall, though, P&G is a consumer and investor staple. Either way, it’s a solid dividend pick, and yes, one of the best dividend stocks of all time.

Read more: Are dividend stocks worth it?



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