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Procter & Gamble For Consumer Goods: If They Don't Sell It, You Don't Need It And A Dividend King

Jun. 09, 2020 7:40 PM ETThe Procter & Gamble Company (PG)15 Comments
William Stamm profile picture
William Stamm


  • Procter & Gamble has increased its dividend for 63 years and presently has a yield of 2.7%, which is above average.
  • Procter & Gamble’s total return overperformed the DOW average for my 53-month test period by 21.64%, which is great and seems to ignore the pandemic.
  • Procter & Gamble’s three-year forward CAGR of 8% is good and will give you increasing growth as the company starts to sell more products in this pandemic.

Procter & Gamble (NYSE:PG), one of the largest suppliers of consumer products and personal care products in the United States and 180 countries worldwide, is a buy for the conservative income and total return investor with the present entry price looking worth a buy. The management of Procter & Gamble is good and has continued to grow the business by using its cash to expand the product base. Procter & Gamble is being considered for The Good Business Portfolio, my IRA portfolio of good business companies that are balanced among all styles of investing.

Source: PG website

Procter & Gamble is being reviewed using The Good Business Portfolio guidelines. I use a set of guidelines that I codified over the last few years used to review the companies in The Good Business Portfolio (my portfolio) and other companies that I am reviewing. For a complete set of guidelines, please see my article "The Good Business Portfolio: Update to Guidelines, March 2020". These guidelines provide me with a balanced portfolio of income, defensive, total return, and growing companies that hopefully keeps me ahead of the Dow average.

When I scanned the five-year chart, Procter & Gamble has an interesting chart going up, and to the right is a good slope from 2016 to the present date with a few bumps down along the way. The chart tells the recovery story from the bump down in 2018 and the present pandemic.

Procter & Gamble is being reviewed in the following topics below.

  • Investment Fundamentals
  • Company Business
  • Conclusions
  • Portfolio Management Highlights

Investment Fundamentals

The Good Business Portfolio Guidelines are just a screen to start with and not absolute rules. When I look at a company, the total return is a key parameter to see if it fits the objective of the

This article was written by

William Stamm profile picture
BSEE The Cooper Union, school of engineering 1966. Engineering manager Harris corp. 23 years Software development, Grumman Corp 10 years as project manager.26 years managing my own IRA accounts, in retirement now with a CAGR of 10.98%

Analyst’s Disclosure: I am/we are long BA, JNJ, HD, DHR, MO, OHI, PM, O, MCD. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Of course, this is not a recommendation to buy or sell, and you should always do your own research and talk to your financial advisor before any purchase or sale. This is how I manage my IRA retirement account, and the opinions of the companies are my own.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (15)

Currently P&G is buying stock for the employees retirement. They changed the program but many of the "grandfathered" employees still remain. This seems to always prop or elevate the price of stock this time of year.. My observation.
BM Cashflow Detective profile picture
Fortunately, I have owned $PG for a long time. But I don't have to say a lot about the current evaluation. It is a very bad value due to its PEG ratio (6.8x)! It says it all.
BM Cashflow Detective profile picture
Fortunately, I have owned $PG for a long time. But I don't have to say a lot about the current evaluation. It is a very bad value due to its PEG ratio (6.8x)! It says it all.
10 Jun. 2020
PG is just not a stock to buy now!
Even a fantastic company should not be bought when it is overvalued!
Have a look at UL!
Dividend king PG, is one great company but overvalued at this time.
PG is a retiree SWAN stock: boring, relentlessly increasing dividend, and products hundreds of millions of people need and use each day. Investing for many years and 10%+ YOC.
The author states PG has 12 pct growth potential.
Dividend Ambassador profile picture
@William Stamm Wow, Mr. Stamm what gives? It seems you are back to recommending blue chip stocks that are ridiculously overpriced. Valuation always matters, whether it is 1969 or 2020. PG is trading at at PE of over 24. The yield is almost as low as the 10 year. Folks who take your recommendation to buy PG here are going to face PE compression and will have much more mediocre returns than those who bought when the valuation was reasonable or those who wait to buy until the valuation becomes reasonable once again. For a while you were focusing on blue chips that were selling for decent prices. But now it seems you have gone right back to your old ways and it seems you are back to recommending seriously overpriced blue chips. Don’t get me wrong. PG is a great, great company. I own it but I bought at a reasonable valuation. I last bought at around $60 in 2012, the last time the stock was reasonable. I even trimmed at bit of my PG position recently. Good things come to those who wait. Patience is a virtue. What is next. Will you recommend MSFT at current valuation? Maybe LLY? Maybe MCD? Or ABT? Or PEP? How ‘bout WMT? I feel like we have gone back in time more than 50 years when it was last in vogue to completely ignore valuation of the most popular blue chip stocks and we had the “nifty fifty” which of course was followed by the 1973-1974 crash. All those nifty fifty stocks were supposed to be “one decision” stocks but their lofty valuation cost enthusiastic investors dearly as they came back to earth.
Dividend Ambassador profile picture
Mr. Stamm, you are back on touting stocks that are just MASSIVELY overpriced. PG is a great company but the stock is crazy overpriced. Any investor lacking analytical skills who buys PG here will have much more mediocre returns than a value investor who either bought PG when it was reasonably priced or one who waits until it becomes reasonably priced once again. Mr. Stamm you were going along nicely there for a while but now you seem to be focusing on recommending overpriced stocks to you readers once again. I own PG but I bought it at a reasonable valuation. I wouldn’t touch it at current valuations.
ferjen profile picture
PG is about fairly priced as it has always traded at a premium:


If one purchased it here, such as someone about to retire and safety is paramount, they will do well with a long term CAGR of 9.7% at their backs. That said, I would not buy it here because from time to time better relative prices can be had for patient investors with longer time horizons.
Ron 2023 profile picture
William -
re: "Procter & Gamble will be considered for The Good Business Portfolio (My IRA account) . . . " Why in an IRA? Any and all dividends paid . . . Instead of paying a probable 15% tax rate on qualified dividends in a taxable account, you may be paying a much higher rate especially if you are close to RMD territory. Also, in a taxable account, you may have losses to offset taxable gains. Just sayin'.
An IRA composition should be of mostly bonds.
William Stamm profile picture
That's what the talking heads say but I want some growth so the value of my IRA stays the same or grows like my account at CAGR of 10.6% over a long period of at least 25 years. I also have some companies that act like bonds but for me 70% in bonds is much too conservative.

Thanks for your comment
Thanks for sharing.
William - It offers products under the brands: You missed Tide detergent.
That is a big one.
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