Procter & Gamble Has Raised Its Dividend for 70 Straight Years. Here's Why That Matters in a Sell-Off

Procter & Gamble (PG) has maintained a 70-year streak of raising its dividend annually, earning the title of Dividend King. Despite the current 2.6% forward yield being lower than the 10-year Treasury's 5%, P&G's total returns have been impressive over the past decade and three decades. The company's resilience during recessions, driven by sales of essential household and personal care products, has contributed to its consistent growth.

P&G streamlined its portfolio to focus on higher-growth brands, resulting in strong organic sales and core EPS growth. Although recent fiscal years saw a slowdown in growth, attributed to inflationary pressures, P&G managed to maintain its dividend payouts and invest heavily in share buybacks. Looking ahead, P&G anticipates continued dividend growth and returns to shareholders, driven by price hikes, brand premiumization, and expansion into emerging markets like China and Latin America.

With a current stock price of $160, trading at 23 times its expected core EPS for 2027, P&G's valuation could be justified, especially as investors seek safety in defensive stocks amidst rising rates and yields.