Is Procter & Gamble a Safe Investment Now?


By Marc Lichtenfeld, Wealthy Retirement, Wednesday, March 25

The recent plunge in the stock market triggered by the COVID-19 outbreak is likely due to fears that corporate profits will fall off a cliff as individuals and businesses drastically cut spending.

But if you’ve been in a supermarket lately, chances are you’ve bought (and maybe hoarded) some Procter & Gamble (NYSE: PG) products.

Its brands include Charmin, Pampers, Tide, Crest and Pepto-Bismol – all things that people don’t want to chance being without in a time of crisis.

Less crisis-driven household name brands under Procter & Gamble include Old Spice, Swiffer, Dawn and Febreze.

These are staples that most households buy throughout the year in good times and bad.

Procter & Gamble is the epitome of a Perpetual Dividend Raiser. In fact, the last year that the world didn’t experience a dividend increase from Procter & Gamble was 1956… the same year that President Eisenhower won reelection, “Heartbreak Hotel” by Elvis Presley topped the charts and Around the World in 80 Days won best picture at the Oscars. That was more than six decades ago.

That’s a heck of a streak.

Procter & Gamble has operated in all kinds of conditions in the past, but can its dividend weather the coronavirus?

Despite its brands perhaps not being the most glamorous, Procter & Gamble makes products and brands most people buy. And though competition is fierce, free cash flow has been climbing the past few years.

WERCHART

Free cash flow has been steadily climbing. This year, it’s projected to grow more than 5%. Now, the impact of COVID-19 will probably affect sales and cash flow, though it may actually help Procter & Gamble in the short term (specifically in the first quarter) as people stock up on toilet paper and other essentials.

I believe the consumer products company can still hit its targets this year.

So unless we see Taco Bell’s sales numbers rise, it may take a while for Americans to get through all that toilet paper. Look for second and third quarter numbers to lag.

Procter & Gamble’s quarterly dividend is $0.746 per share, or $2.984 annually. This year, the company is expected to pay out $7.38 billion in dividends, or just 58% of its free cash flow. That means even if free cash flow slips as a result of a slower economy this year, it will still generate plenty of cash to pay the dividend.

The company’s business should easily support the dividend. And the fact that management would likely do everything it could to continue the six decades-plus streak of annual dividend raises makes it even more secure.

In uncertain times, it’s comforting to have something as certain as Procter & Gamble’s dividend.

Dividend Safety Rating: A

Dividend Grade Guide

Dividends that Could Pay 100% Yields [sponsor]

Do the math, and a dividend with a yield of 100% would take your initial investment of $1,000, and pay you $1,000 every single year, for life. The good news is, these dividends do exist…

I call them “Extreme Dividends,” and I’ve found three that you should take a look at. All of them have the potential to pay out 100% or more of the initial investment in yields over time.

As you’re about to discover, this is truly the income secret you never knew existed.

It’s even possible to nail a 1,099% yield payout on one of these “holy grails” of dividends.

But see it all for yourself, I’ve put together my findings in a free presentation…

Click here to see “Extreme Dividends” now.



 
 

Is Procter & Gamble a Safe Investment Now? | www.RediNews.com | Copyright © 2013 - 2024, All Rights Reserved

Nothing in RediNews.com is intended to be investment advice, nor does it represent the opinion of, counsel from, or recommendations by BNK Invest Inc. or any of its affiliates, subsidiaries or partners. None of the information contained herein constitutes a recommendation that any particular security, portfolio, transaction, or investment strategy is suitable for any specific person. All viewers agree that under no circumstances will BNK Invest, Inc,. its subsidiaries, partners, officers, employees, affiliates, or agents be held liable for any loss or damage caused by your reliance on information obtained. By visiting, using or viewing this site, you agree to the following Full Disclaimer & Terms of Use and Privacy Policy. Video widget and market videos powered by Market News Video.