This is quite unusual for me to have another buy in such a short time. One month have not passed since we bought American Electric Power back in mid January and here we are again buying dividend paying stocks. This time the funds were not even in the saving account and I have “borrowed” some funds from my wife account agreeing that I will “pay it off” from 200 EUR/mo. contribution that we have agreed on as the current market dip was to good to pass 🙂
Yes, yesterday we bought 7 shares of Procter & Gamble paying 82,49 USD / share or paying 587 USD (incl. fee). With current dividends of 0,69 USD/quarter YOC stands at nice 2,3% after tax (-30%) giving us +13,9 USD or +11 EUR annual dividend income and increasing our Passive dividend income to 364 EUR. or 30 EUR/mo.
Shares were still a bit overvalued at 22 P/E according to present EPS 3,75$ and future P/E stantds at 19,7. Dividend payout ratio if taking into account estimated future EPS of 4,2$ stands at 66%, which is also a bit high, but still bearable. Company is over 180 years old and has increased its dividends for the past 61 year. Last increase was from 0,67$ to 0,69$ of just by +3%. Company has been facing challenges increasing their sales and earning in the past few years. What I like the most is their quite strong balance sheet with Equity ratio of 43% and quite low leverage of x1,4 NetDebt/EBITDA taking into account quite good cash reserve of 19 bn.$ and 38 bn.$ financial debts. So financials are a mix of good balance sheet and a bit flat earnings.
But one of the main reasons why we bought PG is that it has extremely well known and strong brand. I managed to find 5 PG products that we use 🙂