Procter & Gamble declares dividend amid tepid stock performance and Gillette writedown

10 Jan 2024 --- Consumer goods giant Procter & Gamble (P&G) remains a “dividend aristocrat” with a quarterly payout of US$0.9407 for its shareholders.

The company, which owns brands from Always and Head & Shoulders to Pantene and Pampers, has posted a dividend for 133 consecutive years since its incorporation in 1890 and boosted it for 67 straight years.

P&G says it has a “commitment to return cash to shareholders, many of whom rely on the steady, reliable income earned with their investment in P&G.”

Broader market outperformed P&G last year
Shares of Procter & Gamble dropped by about 2.8% in 2023, while the broader market S&P 500 posted a solid gain of 23%.

While the stock’s performance lagged the broader market significantly last year, the company is still seen as a reliable dividend stock that delivers value to shareholders.

Procter & Gamble recorded billions in charges after shaving value of its Gillette business.P&G shaved billions off Gillette
Last December, P&G said it would record up to US$2 billion in charges over two fiscal years due, in part, to the writedown of its Gillette business, which was acquired in 2005.

The company has a worldwide footprint with operations in approximately 70 countries but says some operations will be cut due to the high value of the American dollar.

P&G is restructuring operations in Nigeria with only imports remaining while it competely divests its textile and home care business in Argentina due to “difficult macroeconomic conditions.”

St. Bernard Soap closing after 125 years
Personal Care Insights reported this week on the closure of St. Bernard Soap, a manufacturing company founded by Procter & Gamble in 1886.

P&G sold the plant in 2003 but still produced bar soap for brands such as Ivory. It will shut down permanently in March, though, with a union representative blaming the closure on the loss of P&G as a client, which was said to represent about 90% of the plant’s business with P&G brands Oil of Olay, Safeguard, Ivory and Old Spice.

P&G says it will consolidate contract manufacturing and shift production to its plant in Boston, US.

Looking ahead to earnings release
The world’s largest consumer products maker reports quarterly earnings later this month, with analysts expecting earnings per share of US$1.71. That would represent a 7.55% jump versus the same quarter from the year before.

By Anita Sharma

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