Headquartered in Cincinnati, Ohio, The Procter & Gamble Company (NYSE:PG) is focused on providing branded consumer packaged goods in more than 180 countries. The company was incorporated in Ohio in 1905, having been built from a business founded in 1837 by William Procter and James Gamble. PG currently competes in 37 product categories and has five reportable segments: Beauty, Grooming, Health Care, Fabric Care and Home Care, and Baby Care and Family Care.
I'm busy transferring stocks in my portfolio at Scottrade to DivGro. On Sunday, I transferred The Coca Cola Company (NYSE:KO) and today is PG's turn. In each of these posts I'll be providing details of past transactions and explain why I'm a shareholder. Additionally, I'm doing a thorough analysis of each stock to determine fair value.
I bought 32 shares of PG in two batches at an average buy price of $79.49 and an average yield on cost (YoC) of 3.26%. With this transfer, DivGro's projected annual dividend income increases by $84.85 and I'm adding $102.14 of past dividend income.
I bought 32 shares of PG in two batches at an average buy price of $79.49 and an average yield on cost (YoC) of 3.26%. With this transfer, DivGro's projected annual dividend income increases by $84.85 and I'm adding $102.14 of past dividend income.
PG pays quarterly dividends of 66.29¢ per share, or $2.6516 annualized. Given a per share price of $75.08, the stock yields 3.53%.
Transactions
| 2014-02-24 | Bought: 25 shares of PG at $78.59 per share: | $ | 1,964.75 |
| 2014-05-15 | Dividend on 25 shares at 64.36¢ per share: | $ | 16.09 |
| 2014-08-15 | Dividend on 25 shares at 64.36¢ per share: | $ | 16.09 |
| 2014-11-17 | Dividend on 25 shares at 64.36¢ per share: | $ | 16.09 |
| 2015-02-17 | Dividend on 25 shares at 64.36¢ per share: | $ | 16.09 |
| 2015-05-15 | Dividend on 25 shares at 66.29¢ per share: | $ | 16.57 |
| 2015-07-07 | Bought: 7 shares of PG at $82.61 per share: | $ | 578.27 |
| 2015-08-17 | Dividend on 32 shares at 66.29¢ per share: | $ | 21.21 |
| Total Capital Invested | $ | 2,593.02 | |
| Total Dividends Received: | $ | 102.14 |
My 2 buys are indicated in the following chart. The second purchase of 7 shares was at a somewhat higher level than the first purchase. It happens to round out the total capital invested to about $2,500, which is the usual size of my DivGro buys.
PG is trading about $5 per share lower than my average buy price. Taking dividends into account, my total return is -1.51% or about -1% annualized. The dividend payback is 4.02%.
Why PG?
In an article I wrote for Seeking Alpha last year, PG happened to be the fourth most popular dividend growth stock. Below is a visual representation of The Blogger's Dividend Growth Portfolio, a portfolio I compiled last year containing the 52 most popular dividend growth stocks trading on U.S. exchanges, based on the publicly available portfolios of bloggers in my blogroll.
With this transfer, I now hold shares of the 10 most popular stocks in my DivGro portfolio.
Here are some additional reasons I like PG and why I decided to transfer the shares to DivGro:
- PG is a Dividend Champion and a member of the S&P 500 Dividend Aristocrats.
- The company has a stellar track record of 59 consecutive years of dividend increases.
- PG yields about 3.5% and has a 5-year dividend growth rate of 8% annually.
- PG's products enjoy strong brand recognition and are sold in 180 countries.
- No fewer than 25 of PG's brands each generate at least $1 billion in sales annually!
Do you own shares of PG? Is the stock trading at, above, or below fair value? Please share your ideas about PG in the comments section.
I own shares of PG and expect to continue holding for a while, although DG might be a bit muted for the next couple of years. It'll be interesting to see how things play out with them shedding brands and becoming a more focused company. I think shares are trading around the fair value range and since it makes up just under 3% of my portfolio I'm not looking to add more shares just yet.
ReplyDeleteWhen can we expect an update on the bloggers portfolio holdings?
Yes, it looks like dividend growth is slowing down. It seems like PG has traded around the fair value range for a while now. Its one reason that I haven't bought shares for DivGro yet and why PG now enters DivGro through the back door, so to speak...
DeleteI've been thinking about revisiting the blogger's portfolio before the end of this year. Before doing so, I need to skim through my blog roll to see if any of the blogs have become dormant. I would prefer to use current data only. With the list as long as it is, that implies several hours worth of work, which I don't have to spare right now!
Good sharing there!
ReplyDeleteOK, thanks David!
DeleteIt's hard to go wrong with P&G... It has compiled one of the best collections of brands in the world.
ReplyDeleteI agree -- isn't it amazing that so many of its brands generate $1 billion a year? Remarkable. I'm happy to bring PG into my DivGro portfolio!
DeleteThanks for visiting and commenting, Ben!