Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

The Procter & Gamble Company (PG), Kimberly Clark Corp (KMB), Chevron Corporation (CVX): A Giant Dividend Grower for Your Retirement Portfolio

Page 1 of 2

The Procter & Gamble Company (NYSE:PG)I have a few suggestions for those of you in or near retirement and looking to add another dividend stock to your portfolio.

Based upon my experience, I chose a few criteria that I consider important when selecting dividend-growth stocks that keep up with inflation over the long term (and don’t keep you up at night). These criteria include:

1. Moderate yield (3% to 3.5%)

2. Dividend increases every year for a long period of time (25 years is a good timeline to use.)

3. Market cap of over $100 billion (a company that size will not easily fail.)

4. Companies from the consumer-products (except tobacco) sector and the oil/gas industry (since I am familiar with them)

A screener I used spit out three stocks (one of which I already own). Several other companies fell just short in one or more of the categories. They can be considered at another time.

I discuss each of the three candidates in detail below and go beyond the screening criteria to make the case to buy the stock or not based upon the dividend and other fundamentals.

Not a close shave

The consumer-products titan The Procter & Gamble Company (NYSE:PG) is currently in my portfolio. The owner of brands like Crest, Pampers, Tide and Gillette, all items that people need regularly, rakes in the cash, which allows it to pay a dividend of $2.41 per share per year. The dividend has been increased every year since 1956 and grown at a 9% compounded annual rate since 2008. The current yield is just over 3%.

The Procter & Gamble Company (NYSE:PG) has all of the ingredients in place to keep the dividend rising:

1. Payout ratio of 50% leaving some space to grow the payments;

2. Modest debt (32% long-term debt-to-equity ratio);

3. Improved growth outlook after a management shakeup that brought back former CEO A.G. Lafley;

4. Plenty of free cash flow ($3.2 billion)

Maker of Huggies on the right path

Another consumer-products company that has been a dividend stalwart for over 25 years is Kimberly Clark Corp (NYSE:KMB). It has increased the dividend, currently at $3.24 a share, by 6% per year over the last half decade. The yield is around 3.3%.

Can the company keep it up?

Let’s take a look:

1. Slightly elevated payout ratio (66%) but still a little room for expansion;

2. A high long-term debt-to-equity ratio of 97%, so it might have difficulty in the future increasing the dividend unless some debt is paid down;

3. Earnings have been increasing recently but total growth has been relatively flat over the last five years (this may need to be watched for a bit to see if the trend continues.)

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...
X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!