The Procter & Gamble Company, better known as PG, is a multinational consumer goods company that has been around for over 180 years. It is one of the largest companies in the world, and it is a great example of the success that well-run businesses can achieve over time. PG has a long history of paying dividends to its shareholders, and it has become one of the most reliable income stocks on the market. In this article, we will be taking a look back at PG’s dividend history over the past decade.
PG’s Dividend History: 2010-2019
The 2010s saw PG continue its tradition of paying out consistent dividends to its shareholders. The company has paid out a dividend every year since 1891, and this trend has continued uninterrupted since then. Over the past decade, PG has paid out an average dividend yield of around 2.6%. This is lower than the average yield of the S&P 500, which is currently around 2.9%. Despite this, PG’s dividend is still considered to be a reliable source of income for investors.
PG has increased its dividend every year since 2010, and the stock’s dividend has grown at an average rate of around 8% per year. This growth rate is slightly higher than the 7.5% average growth rate of the S&P 500 over the same period. In addition, the company has also increased its dividend payout ratio over the past decade, from around 40% in 2010 to around 50% today. This means that the company is now paying out a larger proportion of its earnings as dividends.
The Impact of the Last Recession on PG’s Dividend
The Great Recession of 2008-2009 had a significant impact on the stock market, and many companies were forced to reduce or even eliminate their dividends in order to conserve cash. Fortunately, PG managed to avoid this fate and continued to pay out its dividend throughout the recession. In fact, the company even increased its dividend payout ratio during this period, from 40% in 2008 to 50% in 2009.
This shows that PG is a resilient company that is able to weather economic downturns and still remain profitable. This is one of the reasons why the stock is considered to be a safe and reliable income stock for investors. The company’s ability to increase its dividend payout ratio during the recession is a testament to its commitment to rewarding its shareholders.
The Effect of Share Buybacks on PG’s Dividend
In addition to increasing its dividend payout ratio, PG has also been using share buybacks to reward its shareholders. The company has been buying back its own shares since 1998, and over the past decade it has bought back over $13 billion worth of its own shares. This has had a positive effect on the stock’s dividend, as the company has been able to offset the dilutive effect of the share buybacks by increasing its dividend payout ratio.
This strategy has been successful in helping PG to maintain a consistent dividend yield over the past decade. It has also helped to increase the stock’s earnings per share, as the company has been able to reduce its share count. This has helped to increase the stock’s valuation, as investors are willing to pay more for stocks with higher earnings per share.
Conclusion: PG Is A Great Dividend Stock
PG has a long history of paying out consistent dividends to its shareholders, and over the past decade it has managed to keep its dividend yield at a steady level. The company has also increased its dividend payout ratio over the same period, and it has used share buybacks to offset the dilutive effect of the buybacks. This has helped to maintain the stock’s dividend yield, and it has also helped to increase the stock’s earnings per share. For these reasons, PG is a great dividend stock for income investors.