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Procter & Gamble Co. (NYSE:PG): What Every Investor Needs To Know

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When quality stocks are invested in, it builds a portfolio of lasting wealth and longtime shareholders of Procter & Gamble Co. (NYSE:PG) are aware of this very fact.  This company has paid dividends for 124 years, consistently and without fail.  In addition, the payouts have increased for more than half of those years.  It is vital to remember that these increases were in the past and smart investors need to focus on future growth.  With this in mind, there are a couple of things that P&G dividend investors need to know about the financial health of this giant company.

Yield is sacrificed for reliability

Procter & Gamble Co. (NYSE:PG) does not provide high yields, but this should not make a difference to long term investors as this is a steady growth company.  The average 65% payout ratio means that management should be able to continue generous payouts to investors for many future years.  Since dividends have increased for 58 years straight, it is clear that P&G puts their shareholders first.

During the fiscal year of 2014, the dividend increased by 7% and returned close to $7 billion in dividend payments back to the loyal shareholder over that same time period.  In addition, the management team of Procter & Gamble Co. (NYSE:PG) spent close to $6 billion in repurchases which meant that shareholder returns totaled almost $13 billion in cash.

There is no need for investors to worry that Procter & Gamble Co. (NYSE:PG) will burn through all their cash reserve because they currently generate over $80 billion sales every year.

Procter & Gamble Co. (NYSE:PG) sells underperforming brand names

Recently, P&G said it plans to offload close to 100 non-core brands in an attempt to stimulate growth.  This is not to be a problem or concern for future earnings as the core brands account for approximately 90% of all the company’s revenue.  More importantly, the company does not plan on selling any of its core brands that each generates annual sales between 1 and 10 billion dollars.

They did agree to sell the Duracell brand battery to Berkshire Hathaway in exchange for the P&G stock that is currently owned by Berkshire Hathaway.  This is a positive move as it allows management to focus more on their core brands while at the same time provide some tax relief and benefits to the overall business.

This is all good news for long term investors of P&G because essentially they are putting more cash, and efforts into their best performing brands.  Procter & Gamble Co. (NYSE:PG) is a winning and recommended investment and should continually reward their shareholders for many future years.

Today, Procter & Gamble Co. (NYSE:PG) was 88.62 at the opening bell and at 9:40 a.m. Eastern Daylight Time, it rose to 88.78.  The 52 week outlook ranges from 75.26 to 89.88 with a marketing cap of 239.76 billion and the company is currently 60% inst. own.

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