Consumer products giant
Procter and Gamble Company
(
PG
) announced that its board of directors has approved a 7% hike to
its regular quarterly dividend. This is the 56th consecutive year
for which the company hiked its quarterly dividend.
P&G will now pay 56.2 cents per share of dividend to its
shareholders compared to 52.5 cents paid earlier. The increased
dividend will be paid on May 15, 2012, to shareholders of record as
of April 27, 2012 for common stock and the Series A and Series B
ESOP Convertible Class A Preferred Stock. The annual yield on the
dividend is 3.4%.
The increased dividend reflects the company's sound financial
position. Signs of recovery in the economy have made share buybacks
and dividend increases a common factor among companies, who are
sitting on ample cash. Apart from enhancing shareholders' return,
such a strategy lifts the market value of the stock.
Procter & Gamble Co. recently reported modest results for
the second quarter 2012, with net earnings from continuing
operations sliding 2.7% year over year to $1.10 a share.
The company forecasts third-quarter 2012 net earnings from
continuing operations and core earnings to be in the range of 91-97
cents per share, down 5% to up 1% versus a base period EPS of 96
cents.
For the second half of 2012, diluted net earnings per share from
continuing operations and Core earnings per share are expected to
increase 4%-9%.
Procter & Gamble exited the quarter with cash and cash
equivalents of $2,768 million. and long-term debt increased year
over year by $1,990 million.
Procter & Gamble has undertaken a cost reduction program
under which the company announced slash over 5,700
non-manufacturing jobs during the current fiscal year. P&G
anticipates that by trimming down 5,700 jobs, it will save up to
$10 billion of cost, including $1 billion in marketing costs and $3
billion in overhead costs, by the end of the fiscal year ending in
June 2016.
Cincinnati based Procter & Gamble Co. has stiff rivals like
Colgate Company
(
CL
) and
Unilever
(
UL
). Currently P&G holds a Zacks #3 Rank, implying a short-term
Hold rating. On a long-term basis, we maintain a Neutral
recommendation.
COLGATE PALMOLI (
CL
): Free Stock Analysis Report
PROCTER & GAMBL (
PG
): Free Stock Analysis Report
UNILEVER PLC (
UL
): Free Stock Analysis Report
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