Dividend Aristocrats Part 28: Procter & Gamble Co (PG)

Recession Performance

Procter & Gamble Co (NYSE:PG) is an extremely stable corporation due to its diverse portfolio if disposable consumer goods.

As one would expect from a highly stable business, Procter & Gamble operated well throughout the Great Recession of 2007 to 2009.

The company saw a 1.65% decline in EPS from 2008 to 2009, and a 1.40% decline from 2009 to 2010.  Procter & Gamble’s growth stalled through the recession, but the company remained profitable throughout and saw only modest downturns in earnings-per-share.

Procter & Gamble’s earnings-per-share each year through the Great Recession of 2007 to 2009 and the subsequent recovery is shown below:

– 2007 earnings-per-share of $3.04 (high at the time)

– 2008 earnings-per-share of $3.64 (high at the time)

– 2009 earnings-per-share of $3.58 (modest decline from high)

– 2010 earnings-per-share of $3.53 (recession low)

– 2011 earnings-per-share of $3.93 (new high)

Valuation & Final Thoughts

Procter & Gamble is currently trading for an adjusted price-to-earnings ratio of 19.1.  This is likely around fair value for a high quality business such as Procter & Gamble.

One of the more appealing aspects of Procter & Gamble is its stability.  The company’s stock has a low price standard deviation of just 17.5% – one of the lowest of any publicly traded stock.

Procter & Gamble’s mix of quality brands, low volatility, reasonable growth prospects, fair valuation, and high dividend yield give it a high rank using The 8 Rules of Dividend Investing.

Disclosure: None