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Procter&Gamble Is Now Part Of The Dividend Yield Passive Income Portfolio


Yesterday was Friday and I have to decide, like every Friday, what kind of stock I should put into the dividend yield passive income portfolio (DYPI). After I screened my current holdings, one thing become soon clear: I needed to increase my low volatility stocks with a beta ratio of less than one.

So I looked around at some stocks which every long-term dividend growth investor should own – A must have investment. Finally my choice fell on Procter & Gamble.

Procter & Gamble (PG) is a consumer goods company. The company operates in five segments: Beauty, Grooming, Health Care, Fabric Care and Home Care, and Baby Care and Family Care. Linked is a nice company profile from the “Dividend Growth Investor” as of February 2012.

Procter has a current P/E ratio of 22 and forward price-earnings are expected at 16. Earnings growth for the company is expected at 8.59% for the next year and 8.31% for the next five years.

Procter & Gamble is no shooting star at the capital market. The company suffered a little bit under the current debt crisis and the after-effects from the financial crisis in 2008. High unemployment rates hit the company’s business model. People need to save money and choose cheaper products. But PG is still well diversified and generates offshore sales of around 50% of total revenues.

Competitors from the personal products industry are Colgate, Kimberly-Clark, Estee Launder or Avon Products. Below this peer, Procter is one of the highest valuated companies but also one of the stocks with the highest-quality.

I put 25 shares with a total amount of $1,700 into the dividend yield passive income portfolio. The new stake will generate around 50 bucks in dividends per year. The total income from all 12 stocks is now around $644.91 per year. The income comes from dividends of invested capital of $16,776.05.

The yield on cost amounts to 3.84% and the current average yield amounts to 3.82% due to the fact that the portfolio has small capital gains.

My portfolio is up 0.39% since October 5, 2012 when I funded it with $100,000 virtual. From this date measured, the Dow Jones index is down 3.89%, the S&P 500 has a performance of -1.77% and the NASDAQ is down 2.93%.

So I'm not proud of this result because in markets that are going sharply up the strategy will underperform the market because I buy slowly stocks. Every week I put one position with an amount of around thousand dollars or so into the DYPI-Portfolio.

For the time being I have around $83,535.95 of free cash for further investments. I like to place this money until next year into the portfolio and try to increase the dividend income to the total annual amount of 3-4k.
This shouldn't be a big problem. All I need to do is to buy stocks with a yield around 3%-4%. Why I do this?

I like to show you that if you invest money over a long period of time and you hold these investments, not some investments - the best investments with growth and dividend growth which is fairly valuated, you will make money.

Buying dividend stocks this not a one-way strategy to high returns. You could make big losses with stock trading. But if you have a long investment horizon and you have invested money into the best dividend growth stocks than your investments should deliver a good return on over the long-run.

Procter & Gamble is one of my biggest positions in my real private portfolio. I have around 4% of my net worth invested in this company which I own for several years. My biggest position is still Philip Morris.

If I grow up my portfolio I need to buy additional Procter shares in order to keep the position at the same level. 50% of my portfolio is hedged with stocks like Procter & Gamble. Coca Cola, PepsiCo, Kimberly-Clark, Altria, Nestlé etc. are other stocks I love. All these are well-diversified companies with strong brands and global market presences.

What do you think about Procter & Gamble? would you buy the stock now. Do you own Procter & Gamble? Let me know, write a comment in our box below!

Here is the current portfolio:

Sym
Name
P/E Ratio
Dividend Yield

Buy
# Shrs
Income
Value
TRI
Thomson Reuters C
N/A
4.36

28.90
50
$64.00
$1,448.00
LMT
Lockheed Martin C
10.62
4.49

92.72
20
$83.00
$1,862.60
INTC
Intel Corporation
9.17
4.14

21.27
50
$43.50
$1,038.25
MCD
McDonald's Corpor
16.96
3.19

87.33
15
$43.05
$1,352.70
WU
Western Union Com
6.81
3.09

11.95
100
$42.50
$1,359.00
PM
Philip Morris Int
17.1
2.84

85.42
20
$48.58
$1,699.00
JNJ
Johnson & Johnson
23.17
3.39

69.19
20
$48.00
$1,405.40
MO
Altria Group Inc
16.79
5.28

33.48
40
$68.00
$1,274.00
SYY
Sysco Corporation
17.23
3.33

31.65
40
$43.20
$1,278.40
DRI
Darden Restaurant
12.99
4.09

46.66
30
$55.80
$1,353.90
CA
CA Inc.
11.49
4.42

21.86
50
$50.00
$1,109.50
PG
Procter & Gamble
19.45
3.17

68.72
25
55.275
$1,718.00
















$644.91
$16,898.75
















Average Yield
3.82%
















Yield On Cost
3.84%

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