Personal Finance

How Risky Is The Procter & Gamble Company?

PG Chart

As a 179-year-old diversified producer of household products, Procter & Gamble (NYSE: PG) is often regarded as one of the most risk-free stocks on the market.

It's a Dividend Aristocrat to boot, having raised its quarterly payout for 60 consecutive years, and now offers a healthy dividend yield. Selling product like soap, laundry detergent, and razors that are as timeless now as they were a century ago, the company seems to have a business built to last.

PG Chart

PG data by YCharts

As a defensive stock, it's worth noting that P&G may be more likely to outperform the broader market during a sell-off. Perhaps more importantly for dividend investors, the company's dividend growth has slowed dramatically.

Procter & Gamble Dividend History

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In the last two years, it hiked its dividend by 3% and then just 1%. With a payout ratio of 73%, the company has some room to raise its dividend faster than that, but without significant increases in earnings growth it will be hard for the company to beat low-single digit increases.

Ultimately, what defines risk for an investor is the chance of losing money on a given investment. With its solid dividend payout and stable of diversified brands, investors can probably count on a modest return from P&G in the coming years, but its recent underperformance against the S&P 500 is a lesson. Even for investors looking for low-risk stocks, there are probably better places to put your money.

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Jeremy Bowman owns shares of Netflix. The Motley Fool owns shares of and recommends Amazon.com and Netflix. The Motley Fool recommends Unilever. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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