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Procter & Gamble (PG) Dividend Stock Analysis

by | Dividend Aristocrats, Dividend Champions, Dividend Kings

Procter & Gamble Logo

Procter & Gamble Dividend

(updated 2/23/2018)

The Procter & Gamble dividend has been paid continuously since 1891 and increased for 61 consecutive years; qualifying the company as a Dividend King, Dividend Aristocrat, and Dividend Champion.

Price: $81.07
Dividend Yield: 3.4%

Current Dividend: $2.76
Cash Flow From Operations (CFO) Per Share (ttm): $5.22
Free Cash Flow Per Share (ttm): $3.79

Market Capitalization: $204 B
Enterprise Value: $224 B

         Dividend Analyzer Checklist

                            (updated February 2018)

Valuation Score (20/34 points)

Free Cash Flow Yield (ttm): 4.7% 11/17 points)
EV to EBIT (ttm): 16.3
EV to EBITDA (ttm): 13.0 (9/17 points)
Price to Sales Ratio (ttm): 3.5
Price to Book Value (ttm): 4.1
Price to Earnings Ratio (P/E) (ttm):  23
PE 10: 22

Profitability & Growth Score (15/33 points)

Operating Earnings Yield (ttm): 6.5% (7/15 points)
Net Income (ttm): $10085 M
Gross Profit (ttm): $32701 M
Total Assets: $126644 M
Gross Profitability Ratio = GP / Total Assets: 26% (8/18 points)
Cash Return On Invested Capital (CROIC)(tttm): 12%
Return on Invested Capital (ROIC): 12%

 

Dividend Safety Score (18/33 points)

Dividend Payout Ratio (ttm): 72%
Cash Dividend Payout Ratio (ttm): 71%  (4/12 points)
Net Financial Debt: $18975  M
Total Assets: $126644 M
Net Financial Debt / Total Assets: 15% (9/12 points)
Net Financial Debt to EBITDA (ttm): 189%
Piotroski Score (1-9) (TTM): (5/9 points)

TOTAL POINTS – (53/100) (50 is an average score)

Earning Report: 1/23/18
Next Earnings Report: 4/23/18

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Rankings & Recommendations

(updated February 2018)

Procter & Gamble (PG) is ranked #197 overall (out of 432) and #19 (out of 44) 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 / Can Be Considered
Looking For Exposure to Consumer Defensive Sector / Can Be Considered
Deep Value Investors / Avoid

Portfolio Position Disclosures:
DVB Portfolio Stocks: None
AAAMP Global Value Portfolio: None
AAAMP Retirement Growth & Income Portfolio: None
AAAMP Treasure Trove Twelve Portfolio: None

Company Description

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.

SWOT Analysis

Strengths

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.

Weaknesses

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.

Opportunities

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.

Threats

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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Disclaimer: While Arbor Investment Planner has used reasonable efforts to obtain information from reliable sources, we make no representations or warranties as to the accuracy, reliability, or completeness of third-party information presented herein. The sole purpose of this analysis is information. Nothing presented herein is, or is intended to constitute investment advice. Consult your financial advisor before making investment decisions.
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