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Procter & Gamble Co. (NYSE:PG) is a multinational consumer goods company with a long history of paying dividends and being a reliable investment for shareholders.
Founded in 1837, it has grown to become one of the largest corporations in the world, with over $80 billion in annual revenue in fiscal 2021. The company's strong financial performance is driven by a diversified portfolio of well-known brands, including Tide, Gillette and Pampers. In addition, Procter & Gamble has increased its dividend payout for 66 consecutive years, making it one of the most dependable dividend stocks on the market. With its strong financial performance and consistent dividend payments, it could be a safe and reliable investment for long-term shareholders.
The company is performing well financially and has absorbed the impacts of inflation, energy issues and higher freight costs quite well. It has also been able to navigate through lockdowns in China and the Russia-Ukraine conflict unscathed. However, these headwinds can affect its performance in the future. The company itself expects a slowdown in revenue growth.
Why is Procter & Gamble doing well?
Procter & Gamble is a giant in the consumer packaged goods industry with a product portfolio that includes some of the world's most iconic brands. The company has been in business for over 180 years and performs well in a challenging market. It has a strong history of innovation and a proven track record of delivering shareholder value.
Considering the company had limited operations in parts of China due to coronavirus-related lockdowns and fewer sales in Russia, the overall numbers were rather impressive for full fiscal 2022, with revenue increasing 5% and earnings per share growing 6%.
The company also projects an increase in revenue and earnings during the 2023 fiscal year, albeit at a slower rate due to expected currency fluctuations and other macroeconomic factors. The numbers help illustrate the importance of having a portfolio of products that are considered necessities. This gives the company an advantage during economic hardship, as people will still need to purchase these items even when their budgets are tight.
Procter & Gamble is effectively marketing its products as affordable options, making them more appealing to budget-conscious consumers. In addition, the company has a diversified product portfolio, which helps insulate it from downturns in any particular industry.
Best in breed among Dividend Kings
One of the best defensive characteristics of Procter & Gamble is the company's dividend. Investors often overlook this aspect of the company, which deserves more credit.