No, no it wasn’t a stock on my beloved June dividend stock watch list. It wasn’t a stock that should be unfamiliar, however. In fact, my recent purchase is a second purchase I’ve made in this iconic, legacy-brand fulfilled company this year! I couldn’t be happier to have made an additional purchase, at an even lower price that an earlier purchase of this dividend stock. On June 1, 2018, I purchased 20 more shares of Procter Gamble (PG)!
The Stock Purchase – Procter Gamble (PG)
What had happened? Well, by the time my June Dividend Stock watch list was written and then subsequently released, those stock prices all increased steadily, each and every day. Talk about frustrating, as a dividend investor. After you do all of the dividend stock screening, find the stocks you would love to add, it feels like the rug almost gets pulled from under you. However, when one rug gets pulled, another rug slides in, as a way to replace the previous one. At least, that just so happened to be the case here, with PG. You see, I was really pushing for a Johnson & Johnson (JNJ) stock decline, to stay/see them over the 3% dividend yield threshold. However, it just never got there. What did happen, though, was another Top 5 Foundation Dividend Stock starting showing more value and PG just came quick onto the screen. In fact, the stock dropped $1.30 per share since my earlier purchase this year, to the time I purchased them on the 1st, at $72.95.
Dividend Diplomat Stock Metrics
Here are the quick dividend stock screener metrics:
- Price to Earnings: At $72.95 with a forward earning project of $4.19, this equated out to a p/e ratio of 17.41, within a range that I don’t mind seeing.
- Dividend Growth: They recently announced this year a dividend increase of 4%, which is moving in the right direction, and has gotten better every year. Further, they have increased their dividend for over 64 years.
- Dividend Yield: With the $72.95 price point, at a dividend of $2.8688, their yield was at 3.93%, well above the S&P 500 (on average) and this yield was greater than my portfolio yield, as well.
- Payout Ratio: Analysts project an earnings per share of $4.19. Therefore, with their dividend of $2.8688 per year, this equates to a payout ratio of 68%. Slightly higher than where I like it, but is coming down steadily over the last few years.
Here is proof of my purchase
In summary, I purchased 20 shares of Procter Gamble (PG) at $72.95 with a $6.95 trading fee for a total cost of $1,465.95. The 20 shares adds $57.37 to my forward dividend income project. In addition, this put my position in Procter Gamble (PG) at over 65 shares within my portfolio. The 65 shares now produce over $186.47 per year, on a go-forward basis or $46.62 per quarter, causing at least a reinvestment of well over half of a share per quarter.
Procter Gamble (PG) Stock Purchase Summary & Conclusion
Why else did I buy PG? It was funny, as it was hard NOT to see their products over the last week! I used Tide when washing laundry. I used Crest when brushing my teeth. I ordered, with a nice coupon and waiting for a sale price, the power-glide Gillette 5 razor, another PG product. For a brand to have that much staying power is hard to do, considering I am as frugal and look for lower prices, as much as I can. I continually find ways to use these products at relatively nice price points and I truly do benefit more from theirs than any other brands. Lastly, my younger brother had his second child and I went to Target (TGT) to look for a small gift for him & diapers came to mind. When asking him, “what is your go-to diaper brand?” He said, “I prefer Luvs”, which is, again, ANOTHER PG product. I was sold.
Therefore, I am very anxious to receive my upcoming quarterly dividend from PG, come August. I know there were other investments on my watch list & other investments being purchased out there, but I couldn’t help the fact that I could add to my PG position at a lower price! Overall, what do YOU think of this purchase? Think PG is dead and is just an old company that will fade out? Think they still have that brand power to last another lifetime? Curious on what you think! As always, appreciate the comments, thank you again for stopping by. Most importantly – good luck and happy investing!
-Lanny
I think you made a well considered decision Lanny. Although I do believe that these old companies will become more lean under pressure of smaller more internet oriented companies. I.e. razors subscription based, etc but they will still be here long after we’re gone.
Great exopansion and I hope to do the same in the future.
Robot –
True, true. You would hope/one would think, that the big old players will be able to either buy their way into the internet based subscription business (I believe there is one with Gillette) or simply buy the competition and wind it down. All in All, great products that are everywhere!
-Lanny
Hey Lanny –
I think it’s a great buy. It’s good to get a good old bread-and-buter, baseline name. The products you listed above are a few of the good reasons to consider the stock as well.
And check out Dollar Shave Club! I do like Gillette, and I know you highlighted until it was on sale, but DSC is so much more affordable. I’ve been using them about 6 months now for like $8 a month, and I’ve probably skipped at least 3 of those months because I had enough razors.
Thanks again for the post. – Mike
Mike –
I have heard great reviews about the Dollar Shave Club, a co-worker just mentioned it last night, actually. A razor blade typically lasts mean around 2 months, at least, partly due to me not shaving every day and letting a mini-beard grow. Are you saying, then, if you spent $8 per month for 6 months, or $48 on razors in half a year, but now have built up a supply? I can understand that. I probably spend $15 per year or so on razor/blade equipment, as I buy the bulk package when discounted, I received 3 5-blades gillette pro-glide with the handle for just a bit under $7; so not too shabby and love the feel of my face. In the end – we are all trying to protect the face and have a smooth finish for the best price!
-Lanny
Good stuff!
I do have a small supply right now, as I probably only shave once or twice a week. I actually only get charged the $8 a month when I opt to receive a pack of razors from DSC. If you skip a month or shipment, you don’t get charged – only when you actually receive a package / order.
That deal you got on the pro-glide is nice. – Mike
Mike –
Real cool, I didn’t know you can stop shipment. So you can flip the switch on and off. Do you get a pack of 4 blade cartridges with your subscription?
-Lanny
I have a sizable position in PG that I hope to hold for a long time. However, I’d like to see more results from their brand re-prioritization that got so much press and have that result in better dividend growth.
I was happy to see PM’s unexpected dividend increase announcement today. Before this years correction, it was my 2nd largest holding. I’m contemplating adding now. Aside from the industry dynamics, do you have any thoughts? I checked and see both of you guys hold PM.
Thanks for the update. Tom
Tom –
Thanks for the comment and agree – PG’s dividend is slowly growing a little bit more than expected and I expect that going forward, too.
For PM, talk about a surprise. I would say that if you have a total position/percentage to your portfolio in mind, then consider adding. As a dividend growth stock, they are enticing. I have a HUGE position, so I’m still sitting on the sideline on them, until I see an upcoming quarter’s earnings release, to see what’s changed from a volume and earnings standpoint. Thoughts on that?
-Lanny
Thanks Lanny, Appreciate your thoughts on PM. Agree with your advice. I have a relatively large position too (before this year’s fall, it was my 2nd largest holding). My main hesitation is the ongoing industry decline. Versus company fundamentals or their execution. Tom
Lanny,
Great buy, PG is on my watch list as well I hope to join you As fellow shareholders soon.
Cheers on the purchase.
Dividend Pursuit
DP –
I’ll be standing here with open arms to welcome you! Good luck and hope you make a decision that fits your strategy/portfolio DP!
-Lanny
Lanny, nice to see both of you guys purchasing more. I think a lot of customer staples are valued decently right now in relation to the rest of the market.
Time –
Thank you for the comment. I would agree. However, I wonder if it’s because of increase in interest rates on deposits, to follow the increase in borrower/deposit rates. The borrowing costs may be putting pressure on those that have debts with adjustable rates or with shorter maturities at fixed rates. Either which way, loving the add!
-Lanny
Hey Lanny, I think it’s a great buy. For investors, buying stocks in good time really matter. Holding a stock for a long time can return big. Thanks for sharing the purchase details, PG in my watchlist and I’ll give it a try in future.
-Kevin
Kevin –
Thank you. A top 5 foundation stock in my book and if they somehow get back below the $73/$72 mark – I’ll be looking to see if there’s room for more!
-Lanny
nice Lanny
a solid stock with a long history of raising dividends. and a lower dollar cost avg. whats not to like?
keep it up
cheers
PCI –
Appreciate it and of course. Averaging down on price paid, great yield, one of the longest histories, period. Then, there are the brands that they have. Just happy with where my money went.
-Lanny
Safe bet! PG is one of my core holding. It cannot be ignored – its yield is close the 10 year high!
Steps –
Thank you very much and I agree, the yield was looking too damn good for PG!
-Lanny
I like the purchase, Lanny. I think the price was right. It looks like you added at a good time given the price increase in the past week or so. You are building a sizable position, and getting almost $47 a quarter will be awesome.
I think PG still has some work to do on their transformation, but seeing the dividend growth pick up this year gives me some reason for optimism. They have so many great brands to work with.
Eng –
I agree, I was able to strike on a quick dip in price. They do have work to do, as always, I am expecting a 2019 dividend increase bigger, again, than the prior (2018) year!
-Lanny
Congrats on the purchase Lanny. I like PG as well and have it in my portfolio. Great way to steadily build that snowball machine.
PG looks like a pretty phenomenal company – and the price slide this year seems like a good opportunity to buy.
Definitely going on my Global Stock watchlist!
Cheers, Gary
Can’t go wrong with good ole P&G. I started a position with them recently as well. I buy their deodorant, shampoo, toothpaste and laundry detergent. I’m sure I have more P&G brands around the house I just haven’t noticed. Long PG!!
Very good move, Lanny, P&G looks attractive. Together with Nestlé and Unilever one of my favorite consumer staples! It already has such a huge brands empire and is a great cash machine.
Keep it up accumulating stocks of these wonderful businesses.