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Will Procter & Gamble Pay For Your Retirement?

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Retirement planning is the ultimate in long-term investing.

Investors want to make sure that the company in which they own shares will be around, pumping out profits until the end. It is also wise to own shares of companies that pay increasing dividends. This can be provided by investing in Procter & Gamble (NYSE: PG).

Like Unilever and Kimberly-Clark, Procter & Gamble is well situated as the world's largest consumer products manufacturer to prosper from the growth of the consumer class around the world.

The company is presently restructuring to benefit even more from that inevitable trend. It is merging its Eastern and Central European unit with the Western European division. The Indian business group will be merged with the Middle East and Africa division. This realignment is projected to help Procter & Gamble increase sales growth and reduce spending.

Up nearly 25 percent for the year, the financials of Procter & Gamble show that it is a stock that will be around for a long, long time, paying increasing dividends to shareholders.

The average profit margin for a member of the S&P's 500 Index is around 8-10 percent. For Procter & Gamble, it is 13.30 percent. The profit margin for Kimberly-Clark is 8.80 percent.

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Earnings per share for Procter & Gamble has picked up after The Great Recession.

For the last five years, it was just 2.60 percent. In 2014, it is projected to be 8.64 percent. For the next half decade, the analyst community sees it being 8.33 percent. By contrast, earnings per share are expected to increase by just 0.70 percent for Unilever over the next five years. That is solid growth for Procter & Gamble that doubles earnings for the company every nine years, which is better than the market average.

What is also better than average for Procter & Gamble is its dividend framework.

That is critical for retirement income and all of investing, as detailed previously on Benzinga. The average dividend for a member of the S&P's 500 Index is now around 1.9 percent. For Procter & Gamble, it is 2.98 percent, just about double that figure. In addition, Procter & Gamble is a Dividend Aristocrat. Those are publicly-traded companies that have increased the dividend annually for the last 25 years.

For a retiree, it is nice to be able to get a raise each year just for being a loyal shareholder!

Procter & Gamble was founded in 1837. In the 176 years since, it has paid for a lot of retirement costs for its shareholders. There is no reason to expect that to change in the decades, or centuries, ahead!

Posted-In: Long Ideas News Dividends Dividends Emerging Markets Economics Markets Trading Ideas Best of Benzinga

 

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