Dividend Increase | Procter & Gamble

Dividend | Dividend Growth | Financial Independence | Freedom | Passive Income
Getting a pay raise while sitting on the couch?  Sign me up!  Thanks Realty Income for yet another dividend increase!
There's an old Chinese proverb that says "the best time to plant a tree was 20 years ago, the next best time is now".  The reason for this is that it takes time for a tree to grow and prosper and for you to start reaping its benefits.  Dividend growth investing is much the same way.  It takes consistent saving and investing as well as time and patience to let the power of dividend growth take hold.

That's why one of my favorite things is when one of the companies I own decides to pay out more in dividends.  You mean I get a pay raise just for owning a small piece of a company?  Not going and doing R&D for new products or technology.  Not selling any products.  Not managing any employees or inventory.  Not making sales calls.  All I had to do was have the foresight to invest some of my savings in excellent companies.  

On April 9th the Board of Directors at Procter & Gamble (PG) apporved of an increase to their quarterly dividend payment.  The dividend was increased from $0.7172 up to $0.7489.  That works out to a 4.4% raise from the prior dividend payment.  Procter & Gamble is a Dividend Champion with 63 consecutive years of dividend increases.  Shares currently yield 2.86% on a forward basis.

While I like Procter & Gamble the business, I'm not exactly liking Procter & Gamble the stock at these valuations.  For more information about the strength of the business and why I feel the stock valuation is too far ahead of the business fundamentals check out my recent analysis on Seeking Alpha.

Since I own 68.412 shares of Procter & Gamble in my FI Portfolio this raise increased my forward 12-month dividends by $8.67.  This is the 8th dividend increase I've received from Procter & Gamble since initiating a position in 2011.  Cumulatively, the organic dividend growth from Procter & Gamble has totaled a whopping 42.7% over that time.  According to US Inflation Calculator the cumulative rate of inflation over that same time is just 13%.  

A full screen version of this chart can be found here.

Procter & Gamble's dividend growth history is quite impressive both in its length and its pace.  Procter & Gamble has historically rewarded patient investors with solid dividend growth with the annualized growth over the rolling 10-year periods ranging from 6-12%.  However, the most recent rolling 10-year growth rate is down at just 5.6%.  I hope to see a return to faster dividend growth like Procter & Gamble saw in the late 1980's although if we can just see 4-7% growth I'll be happy.

The 1-, 3-, 5- and 10-year rolling dividend growth rates since 1971 can be found in the following chart.  

A full screen version of this chart can be found here.

*2019's dividend assumes the new quarterly payout of $0.7489 per share is maintained for the rest of 2019.

Wrap Up

This raise increased my forward dividends by $8.67 with me doing nothing.  That's right, absolutely nothing to contribute to their operations.  Based on my portfolio's current yield of 2.90% this raise is like I invested an extra $298 in capital.  Except that I didn't!  One of the companies I own just decided to send more cash my way.  

That's how you can eventually reach the crossover point where your dividends received exceed your expenses.  That's DIVIDEND GROWTH INVESTING AT WORK!  The beauty of the dividend growth investing strategy is that you build up your dividends through fresh capital investment as well dividend increases from the companies you own.

Thus far in 2019 I've received 17 total increases from 16 of the 54 companies in my FI Portfolio.  Combined those increases have raised my forward 12-month dividends by $99.25.

My FI Portfolio's forward-12 month dividends increased to $6,863.99.  Including my FolioFirst portfolio's forward dividends of $97.81 brings my total taxable accounts dividends to $6,961.80.  My Roth IRA's forward 12-month dividends remain at $452.13.

Do you own shares of Procter & Gamble?  Do you think they can return to dividend growth that's in the 5-7% range on an annual basis?

Please share your thoughts below.


  1. Gotta love those increases. PG is a wonderful company but I sold off my small position in PG (about 20 shares I think) only because I'm narrowing down my list of companies invested in. Congrats on the raise.

  2. Happy to put this one in the bank. Hoping their strategic tranformation over the past several years will yield some bigger dividend increases in future years. Thanks for the write up JC. Tom


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