50 Years of Dividend Increases - PG

Written by The Dividend Guy on June 27, 2006

One of the stocks in my portfolio has been getting a lot of press these days because it is considered to be a “safe or defensive” stock. The rationale is that it sells products that people will need to buy whether the economy is booming or going down the toilet. During recent market activity like we have had, and the Fed raising rates, a lot of reporters have been doing their best to scare the sh!# out of everyone and telling them to retreat to P&G, Coke, etc.

I don’t invest that way. I do not shift in and out of stocks because the market is doing one thing or another. If you have read my blog for any length of time you will know that I tend to buy for the long term. I did not buy P&G because it was defensive - I bought it because it has raised its dividend for 50 years in a row and the evidence tells us this has a great impact on stock performance. As dividends rise, so does stock prices. As a result, investors receive a double benefit - an increasing income stream from the stock and a gain on the share price. That is why I buy P&G.

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4 Comments so far

  1. College Investor June 27, 2006 10:29 pm

    As a new investor, I am trying to follow a similar philosophy with my stock picks. If you do not stay in a stock like P&G for the long term, you are missing out on the benefits of a great company. I enjoy reading the blog, keep up the good work!

  2. rex July 4, 2006 10:20 am

    Am thinking about purchasing pg within my rrsp. my bank won’t reinvest the dividends paid out by american companies. Does yours? If not what are you doing with your dividend payments?

  3. rex July 5, 2006 7:07 pm

    Am thinking about purchasing pg within my rrsp. my bank won’t reinvest the dividends paid out by american companies. Does yours? If not what are you doing with your dividend payments?

  4. Doug July 8, 2006 8:38 am

    Great post! It is the same reason I purchased Colgate-Palmolive, CL. I actually think that CL has slightly better fundamentals (it had a better price when I purchased it as well), but PG is a company that will reward investors for decades. Rising dividends is a good sign of a well managed, controlled growth oriented company. (But always read the 10K!)

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