Analyzing Procter & Gamble Dividend (NYSE:PG)

The Procter & Gamble Company (NYSE:PG) is the mammoth company in personal products, far outweighing its competitors in terms of market value.  Most big companies provide a dividend on their stock and P&G is one of them.  So, let’s analyze their dividend a little further.

DividendGrowthInvestor reports that P&G has raised distributions for 53 consecutive years.  This dividend stock has delivered an average annual total return of 3.30% over the past decade.

Earnings per share have grown at an average pace of 12.50% per annum. For FY 2010, analysts expect the company to earn $4.15/share, which is higher than 2009’s EPS of $3.58. For FY 2011 analysts expect Procter & Gamble to earn $4.10/share. The company has focused on cost cutting, improving efficiencies and streamlining its product portfolio over the past few years. It sold its Folgers Unit and exited its pharmaceuticals operations. As consumer spending picks up, the company’s recognizable brand products could get a nice boost in sales, especially if it increases advertising. Emerging and developing markets, product innovation, focusing on high margin products as well as strategic acquisitions could deliver strong earnings growth over the next decade. The demand for the company’s line of consumer products is generally stable and not much affected by overall economic conditions. The company continues to benefit from its acquisition of Gillette, through cost synergies and sales growth opportunities from its diverse sales channels.

The annual dividend per share has increased by an average of 11% annually, which is below the growth in earnings. An 11% growth in dividends translates into the payment doubling every almost every six and a half years. Procter & Gamble has managed to double its distributions every seven years on average since 1973.

Read more of DividendGrowthInvestor’s report and see graphs.

Studying the chart for P&G, we see the stock set some recent price support at just below $60.  It might be worth picking up some shares of the stock if it dips to near $60 with anticipation of a bounce on the support level.