Dividend Diplomats Recent Buy – Procter & Gamble (PG)

Earnings season has been upon us for this past quarter and wow, things are starting to move, shake, drop, pop and roll.  On April 19th, things were no different.  After seeing quite a few stocks that are strong dividend players drop, one company caught our eye.  I messaged Bert saying, “Alert, PG DROP!”.  The rest was history.  We both ended up purchasing additional positions into Procter & Gamble (PG)!

Procter & Gamble (PG) Stock Purchase

PG has been one of those legendary, legacy-living, dividend packed, dividend aristocrats.  They are a stand-out on our Top 5 Foundation Dividend Stocks for your portfolio.   They have increased dividends for 61 years!  Their 3 year dividend growth rates, prior to this year’s, was a 3%, 1% and 3%.  They came out this year, showing further promise, with a 4% dividend increase.  This is better & heading into the right direction.  Technically, you could say this is an improvement for 2 years in a row.

Lastly, as we all know – they make some of our favorite products.  Products such as, Charmin, Crest, Dawn, Febreze, Gain, GIllette, Oral-B, Tide, Vicks, Tampax; the list goes on.  We see these products every single day.  We hear people talking about one of these products, almost every single day.  That is brand power & loyalty, at it’s finest.  And, there was another announcement on our date of purchase that impacted the company’s brands.  The list will grow, and PG purchased Merck’s consumer brands unit.  This will add brands such as Seven Seas, Femibon, and Neurobion, and many others.  Therefore, when a stock like this drops 5% in a single day, how the heck do you stay on the sidelines?  Let’s just say, we weren’t sitting on the sidelines for this one.

Lanny’s Purchase of Procter & Gamble

You’re damn right I decided to Just Go For It  and make every dollar count in this situation, and that I did.  The stock price had a shock drop of around $4 per share on the 19th or over 5%!  It dropped to a price that I never had been able to purchase them at before, and I just couldn’t resist picking up an aristocrat at these levels.  I purchased 13 shares of Procter & Gamble (PG), to round out my position to just over 45 shares of the consumer monster in my dividend portfolio.  Based on a dividend of $2.869 per share – this added $37.30 on a going forward basis and cost me at total of $965.25, with no commission due to a trade credit, see below.  Price was at $74.25 and PG was yielding 3.86% at the time and a 17.7 price to earnings ratio.

Bert’s Purchase of Procter & Gamble

After Lanny surprised me with the news about PG’s price falling, I was at first pissed off for two seconds that I didn’t catch the price drop myself.  But that feeling quickly went away once he let me know he purchased the stock, I took a second, and decided that I was going to also add to PG for the second time this month.  Yes, I purchased 9.63 shares earlier in the month before the company’s dividend announcement.  So I was pretty darn excited to add an additional 13 shares to PG, just like Lanny, and add $37.30 to my forward dividend income.  Now, I own 76.2008 shares of the consumer giant and will receive $218.60 annually from PG.   But, the caveat is, I will not receive the dividend in May since this purchase missed the ex-dividend date by one day!  It’s okay though and I’m going to hit the third quarter with a full head of steam.  One other note.  Once again, Lanny purchased the stock at a lower price than me as he made the purchase faster.  That’s what happened with our combined purchase of Dominion.  Maybe next time I’ll make the purchase first and get the better purchase price!

Summary

It looks like these combined purchases are becoming common place for the two of us.   We’re lucky that the two of us can talk regularly to each other and quickly arrive at an investing decision.  In the case of PG, this was a relatively easy decision to make that did not require a ton of convincing by both parties for all the reasons discussed above.   Now, we are continuing to build our position in the Dividend Aristocrat, enjoy another solid dividend increase, and patiently wait for the next opportunity to strike.  The market continues to present some nice buying opportunities, so it is all about catching the right stock at the right time.  The name of the game!   So now, let’s focus, side hustle, and build up our cash reserves so we can push forward and continue to purchase undervalued dividend growth stocks!  LETS GO!

Lanny and Bert, The Dividend Diplomats

Facebooktwittergoogle_plusredditpinterestlinkedinmail

30 thoughts on “Dividend Diplomats Recent Buy – Procter & Gamble (PG)

  1. DDs,
    Big fan of PG. I read a lot how people (especially us young guns) no longer use brands, and to an extent that is true, but its also not. Gillette’s lunch is probably getting eaten a little bit by Harry’s, Dollar Shave Club, and beards, but Tampax, Crest, Febreeze and others are only growing faster. Not to mention the miles of untouched market space out there around the world. Good buy, would like to be right there next to you all as a shareholder in the future.
    – Gremlin

    • Gremlin,

      I agree completely with your statement. The brands are not going anywhere and I think the trend you highlighted for Gillette is the exception, not the norm. Plus, in the grand scheme of things, PG is so diversified that it is a blip on the radar rather than a devastating blow to those companies. The trend I would be more afraid of is the increased prevalence of cheaper, store brands found in convenience stores, Target, Walmart, etc. To me, they would have a larger impact. But hey, in the long run and as you said, the global market will allow PG and their brands to continue to expand.

      Bert

  2. Love it. There are so many great opportunities these days with solid names like The Procter & Gamble Company (PG), PepsiCo, Inc. (PEP), Philip Morris International Inc. (PM), General Mills, Inc. (GIS), The Kraft Heinz Company (KHC), General Electric Company (GE), Caterpillar Inc. (CAT), 3M Company (MMM), every health REIT but specifically HCP, Inc. (HCP), Welltower Inc. (WELL), Ventas, Inc. (VTR), LTC Properties, Inc. (LTC) and many utilities like Dominion Energy, Inc. (D), The Southern Company (SO) and PPL Corporation (PPL). There has been no shortage of companies to buy only a shortage of free cash to deploy 🙂 Buying those dips makes sense to me even though the “death knell” has been sounded for packaged food companies and packaged goods companies like PG, UL, KMB and the like. We’ve heard the “death knell” ring for fast food, ring for energy, ring for any AMZN threatened stock like CAH, GWW and more. Keep those consistent buys coming!

    • It is funny Divhut, I wonder how many times each company has been on the verge of getting knocked off during their streak as a Dividend Aristocrat? I would assume this isn’t the first time analysts have been saying that packaged food and brands are a thing of the past. The beauty of finding these long term stocks is that they have stood the test of boom and bust periods and still managed to increase their payout ratio.

      You’re right, there are SO many great discounted stocks out there that you wish you could purchase them all!! Thanks for the great comment.

      Bert

  3. I am heavily leaning towards adding to my Exxon my next buy. But I could also buy PPL as they are both in this one account I have. See what they do in the next couple days. Would also like to add PG and a few others to my main account but staging cash waiting for this transfer to go through.

  4. Great buys gentlemen! I am loving the valuation descents in the consumer staple space. I recently added to my existing positions in KMB and CPB and also initiated a new position in KHC. I nearly initiated a new position in CLX as well, but decided to exercise a bit more patience before pulling the trigger on this one. I anticipate adding some additional shares of PG in the near future as well.

    PIV

    • PIV,

      I’m loving the value in this space as well. I came close to biting on CLX and like you, decided to wait. But even stocks like PEP have fallen in price and I may just pounce on the opportunity here shortly.

      Bert

  5. Nice choice! I haven’t ventured into PG as a single name just yet (although we hold indirectly via funds). Overall, PG is a solid name for many of the reasons you’ve highlighted here.

    In our taxable account, we just topped up our Fundrise investment to around 10k (nice growing quarterly dividend), as well as continue to add to our position in T (our only single name at the moment). I’m looking at many other names but we just topped 300 shares of T over the last 4-5 months and I’m looking to add more.

    Thanks again for sharing. – Mike

    • Mike,

      Thank you very much. Wow, that is a freaking power position for AT&T. Congrats on crossing that milestone and you have to love the dividend that is reinvested each quarter from them.

      Bert

  6. You can never go wrong with PG despite what anyone says about organic sales growth. PG is still a super consumer staple force to be reckoned with. I’m also really loving MMM and KMB at these current levels. I really want to sell my house and load up on these! KMB and PG both are sporting a 4% yield which is absolutely amazing for such stable and strong companies. I can’t wait to see what other purchases you guys make in the next couple of months!

    • Diligent,

      Those are some great names as well and I am a HUGE fan of MMM. It is one of my favorite holdings. I don’t own KMB, but it will be hard to continue to resist going forward at these prices. There are some great options out there, that’s for sure. And I don’t know if I would go that crazy and sell your house haha

      Bert

  7. HI DVD,

    I did not buy PG, there pay out ratio is a bit to high for me, maybe when the price goes below 70 I will add a few
    I decide to pick up a few charts KMB ,Qcomm , WSM

    keep going on with your site

    Willem

  8. It looks like another one of the staples got scooped up at a great price. This was a great opportunity to build onto those positions. Keep up the good work guys and thanks for sharing.

  9. I love reading your blogs and seeing different perspectives regarding the market. I see that both of you have a position in PM. With the price down, are you considering adding to your position?

    • Hi Ryan,

      Thank you for the kind words and the comment! At the moment, I’m content with my position in PM and am going to pass on adding to my position. For now, I’ll just let the dividends re-invest at a lower price and call it a day!

      Bert

  10. Great purchase and I’m fully supportive as it’s hard not to like PG at those prices. But, if you had waited until now, you would have gotten it even cheaper at $72.75, which is the current price as of this writing. Just teasing. I wish I had extra funds to join you in the purchase. I only contribute to PG on a regular monthly schedule regardless of its price, but it would be nice once in a while to take advantage of these price drops.

Leave a Reply

Your email address will not be published. Required fields are marked *