Procter & Gamble has raised dividends annually for nearly 70 years.
Dividend-paying stocks have certain advantages, such as supplying investors with regular income. Their share prices tend to be less volatile, too.
While you may not have enough to invest to live off your dividend income, you don’t need a huge sum of money to get started, either.
But which one is the right stock to invest in? Taking a long-term view, a solid history of not just paying but raising dividends is a good place to start.
With that in mind, here’s why Procter & Gamble (PG +1.41%) tops my list for dividend-growing stocks.
Image source: Getty Images.
Strong brands
Procter & Gamble has one of the largest market capitalizations in the consumer staples sector. Founded in the 1800s, it’s been widely successful for decades. More importantly, the company remains relevant today by selling necessities like shampoo, razors, toothpaste, laundry detergent, and diapers.
Today’s Change
(1.41%) $2.23
Current Price
$160.79
Key Data Points
Market Cap
$374B
Day’s Range
$158.16 – $161.05
52wk Range
$137.62 – $179.99
Volume
464K
Avg Vol
11M
Gross Margin
51.11%
Dividend Yield
2.63%
That may sound boring, but people always need these products. Fortunately, Procter & Gamble has well-established, popular brands that command large market shares. These include Head & Shoulders, Gillette, Crest, Tide, and Pampers.
Still, its business isn’t immune to wider economic factors. Procter & Gamble’s fiscal second-quarter sales, excluding foreign-currency translation effects and acquisitions/divestitures, were flat versus the prior year. The period ended on Dec. 31, 2025. Its results were likely affected by consumers who have grown weary of broad price increases.
But the company continues looking to innovate, and with many products holding high shares of the market, it has a good platform to launch them. Over the long term, that should allow Procter & Gamble to grow sales at a faster clip.
A Dividend King
Even with tepid sales, Procter & Gamble continues to produce plenty of free cash flow (FCF), or operating cash flow less capital expenditures. During the first half of the year, it generated FCF of $8 billion, easily covering the $5.1 billion in dividends. That should provide investors with a sense of comfort that the company won’t cut the dividend rate.
In fact, Procter & Gamble places such importance on dividends, it has paid them since 1890. Better still, the company has raised payments annually for 69 years. That makes Procter & Gamble a Dividend King, an impressive group of companies that have increased dividends for at least 50 straight years.
Using history as a guide, investors can look forward to receiving a higher dividend starting in May. Last year, the board of directors raised the quarterly payout by 5% to $1.0568 a share.
At the present payout rate, the stock has a 2.3% dividend yield, nearly double the S&P 500’s (^GSPC +0.69%) 1.2%.
GIPHY App Key not set. Please check settings