Dividend Diplomats

About the Author Dividend Diplomats

We are the Dividend Diplomats. Two guys in their Mid-20’s in a race to gain more time now before we hit 59.5 years of age for the “normal” retirement age. You can see our goals at the linked page. The Dividend Diplomat journey began in a 1997 Toyota Celica that was struggling over the 200,000 mile mark on our way to Clearfield, PA… One individual had over $1.5K in projected dividend income and the other had more money in his pocket than projected dividends in his portfolio, and let’s just say – most people don’t hold that much cash, if you catch my drift. This is when the journey truly began, a nice 3.5 hour conversation from two CPAs in a beater of a car talking about breaking free from the chains of working as a CPA. We both were fired up, eagerly talking investing strategies and that is when the one Diplomat began his preaching on the Dividend Investing topic and how it takes the nonsense out of the ridiculous world of investing and suddenly made it very clear on the strategy to truly build a cash flowing, incoming thriving portfolio. Here is where we will describe who we are in a short brief as well as a longer story from where we have come from and where we are about to go. Thank you for visiting our site, as we update you on or purchases, stock analysis’, goal status, portfolio updates and, of course – our dividend income monthly breakdowns. Let’s all try to learn and push each other to new lengths to fully reach financial independence, here we go!

Procter & Gamble Co (PG): Our First Stock Purchase of 2017 is a Dividend Aristocrat

We are kicking off 2017 with a dividend aristocrat stock purchase. What better name to buy than to have a stock purchase towards the brand that is in your cousin’s cupboard or bathroom; on your neighbor’s shelf; one so commonplace you might not even realize is the brand you use daily when brushing your teeth with Crest toothpaste? I am talking about Procter & Gamble Co (NYSE:PG), based in Cincinnati, Ohio. This is not the first time I have purchased PG shares, but I am excited that I was able to add this well-branded company to my dividend producing portfolio.

The Stock Purchase

The first business day to trade in 2017 and my purchase for PG has been made. On January 3rd, I had a purchase of Procter & Gamble based on the market price of just under $84 per share using a glorious free trade credit.  I finally had decided that price is very important, but also – the company itself, their core values and hearing about how families love a company, as well as even their employees sealed the deal for me.  Yet, what other reasons encouraged me to purchase PG?  Let’s dive in:

1.) PG was on my 2017 Stocks to Look forward to list.  I wanted to build this position up to 50 shares, and this adds 10.1207 to my ~21 shares that I do own.  Their brands by far are a staple among many households.  How many do you currently use or have?  I use Crest, Dawn, Charmin, Bounty & Gillette, to name a few.

2.) The company is a dividend aristocrat and made my top 5 foundation stocks for a portfolio. Moreover, with over 60+ years of consecutive dividend increases, it is hard not to be confident in that established history and reputable track record.

3.) Though Procter & Gamble’s earnings have been stagnant and have higher P/Es currently than in the past, the company’s shares are still valued below the S&P 500, which has a 26.00 p/e approximately.  Additionally, I am looking forward to PG’s slimmed-down version, to get back to revenue and earnings growth, as the company has slimmed down its brands quite a bit.

4.) The timing of the trade was very solid.  PG more than likely will go ex-dividend within the next 8-10 days. Therefore, with this purchase, I will capture its first dividend of $0.6695 per share.  I am then set up to collect a full year of them from this purchase.  I am ready to capitalize on that opportunity and finally receive more than $20 per quarter from my PG ownership.

See my trade screen shot below: 

I purchased $850 worth at $83.986 per share for a total of 10.1207 shares.  This alone adds $27.10 to my forward dividend income.  In my post on my top 2017 stocks to look forward to, I had discussed that I wanted to reach 50 shares, compared to my previous count at 21.  As such, this has laid a building block on my march towards 50, with only 19 shares left to go.

The Conclusion

My position now sits at ~ 31 shares of Procter & Gamble in my portfolio and is now producing forward income for me of $83.11 or $20.78 per quarter, already crossing the $20 per quarter threshold.  If prices remain consistent at ~84 per share, in order to buy 19 more, I will need ~$1,600 more, excluding fees.  Additionally, with PG’s growth rate being fairly low the last 2 years (2016 – 1% and 2015 – 3%), as it relates to the dividend, I do have confidence the shares will return to their normalized level and make a comeback.  Procter & Gamble’s P/E at the time of purchase was around 21, based on current year expected EPS or 19 based on forward earnings.  The yield at time of purchase was 3.19%- neither too high nor nor too small.  Overall, I am positive on this purchase and PG’s prospects.