Procter & Gamble (PG) Dividend Stock Analysis
Procter & Gamble Dividend
The Procter & Gamble dividend has been paid continuously since 1891 and increased for 60 consecutive years;
qualifying the company as a Dividend King, Dividend Aristocrat, and Dividend Champion.
Current Dividend: $2.7584
Dividend Yield: 3.1%
Cash Dividend Payout Ratio: 76%
Market Capitalization: 229 B
Enterprise Value: 248 B
Sector: Consumer Defensive
Industry: Household & Personal Products
Procter & Gamble (PG) provides branded disposable consumer packaged goods for our daily needs. The middle class is the company’s primary target market.
PG markets its products in over 180 countries through mass merchandisers, grocery stores, membership club stores, drug stores, and department stores among others.
The company divides its products into 5 segments:
Fabric and Home Care (32% of sales) offers products such as Ariel, Downy, Gain, Tide, Cascade, Dawn, Febreze, Mr. Clean, and Swiffer, et al.
Baby, Feminine and Family Care (28% of sales) offers products such as Luvs, Pampers, Always, Tampax, Bounty, Charmin, et al.
Beauty, Hair and Personal Care (18% of sales) offers products such as Head & Shoulders, Pantene, Rejoice, Olay, Old Spide, Safeguard, SK-II, et al.
Grooming (11% of sales) offers products such as Braun, Fusion, Gillette, Mach3, Prestobarba, Venus, et al.
Health Care (11% of sales) offers products such as Crest, Oral-B, Prilosec, Vicks, et al.
Dividend Analyzer Checklist
(updated November 2017)
Dividend Safety Score (20/33 points)
Dividend Payout Ratio (ttm): 47%
Cash Dividend Payout Ratio (ttm): 76% (5/12 points)
Dividend Per Share (ttm:) $2.72
Cash From Operations (CFO) Per Share (ttm): $4.93
Free Cash Flow (FCF) Per Share (ttm): $3.52
Net Financial Debt: $18207 M
Total Assets: $120406 M
Net Financial Debt / Total Assets: 15% (9/12 points)
Net Financial Debt to EBITDA (ttm): 190%
Piotroski Score (1-9) (TTM): (6/9 points)
Profitability & Growth Score (14/33 points)
Operating Earnings Yield (ttm): 5.9% (6/15 points)
Net Income (ttm): $15326 M
Gross Profit (ttm): $32523 M
Total Assets: $120406 M
Gross Profitability Ratio = GP / Total Assets: 27% (8/18 points)
Cash Return On Invested Capital (CROIC)(tttm): 11%
Return on Invested Capital (ROIC): 18%
Valuation Score (14/34 points)
Free Cash Flow Yield (ttm): 4.0% (9/17 points)
EV to EBIT (ttm): 18.4 (3/9 points)
EV to EBITDA (ttm): 14.6 (5/17 points)
Price to Sales Ratio (ttm): 3.6
Price to Book Value (ttm): 4.1
Price to Earnings Ratio (P/E) (ttm): 31
PE 10: 48
TOTAL POINTS – (48/100) (50 is an average score)
Earning Report: 10/24/17
P & G is a master at building brands (over 300 globally); with competitive advantages in distribution and economies of scale (efficiency) in reaching retailers, and understanding consumer needs. No one invests more in market research. Their diversified portfolio of disposable consumer products is unmatched, including 21 brands with 1 billion or more in annual sales. They are a global leader in innovation.
Defending so many brands at one time is difficult. Fake products, generics, and competition from rivals means boosting brands and maintaining market share is expensive. P&G has to spend billions of dollars (approx. 9 billion annually) in advertising to build and maintain their brands.
Procter & Gamble makes products that can be used and disposed of anywhere in the world. World-wide increased penetration has almost no limits.
PG is making a concerted effort to renew growth and revitalize its profitability. This effort includes discarding over 100 brands that were unprofitable or dragging down profit margins.
Deflationary pressures brought about by Competition. Competition. Competition. There are always competitors who provide similar products, both branded and unbranded, that can eat into market share.
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(updated November 2017)
Procter & Gamble (PG) is ranked #184 overall (out of 377) and #28 (out of 42) in the Consumer Defensive sector by the Dividend Analyzer.
Procter & Gamble is a great, steady, slow growing company. Its variety of products, brands, and marketing savvy is beyond impressive. With that said, the company is growing painfully slow.
Type of Investor / Recommendation
Large Diversified Dividend Portfolios / Avoid
Looking For Exposure to Consumer Defensive Sector / Avoid
Deep Value Investors / Avoid
Portfolio Position Disclosures:
DVB Foundation Portfolio: None
DVB Dividend Growth: None
DVB High Income: None
Arbor Asset Allocation Model Portfolio (AAAMP): None
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