Portfolio Update
The FiveTwenty portfolio received $33.33 in dividends in the past week. OZK paid their quarterly dividend during the week.
| Past Week Dividend | $33.33 |
| Current Quarter Dividend (Q4 2022) | $258.78 |
| LifeTime Dividend | $6,554.06 |
| Estimated Annual Dividend | $6,822.51 |
The capital allocation for the week of 10/23/2022 to 10/29/2022 will be used to add to our position in Procter & Gamble (NYSE: PG).
PG – Position Update
Since our last check-in on PG in week 24 of 2022, the company reported Q4 and FY 2022 earnings on 7/29/2022, and Q1 2023 earnings on 10/19/2022. Furthermore, the share price decreased 9.4% from $141.95 to $128.58.
| TTM | Prev. Update | 10-year median | |
| Dividend Streak | 66 years | 66 years | |
| Yield | 2.81% | 2.48% | 2.97% |
| Payout Ratio | 62.13% | 61.5% | 70% |
| P/E | 22.29 | 24.77 | 23.57 |
Q1 2023 earnings report
Did PG’s latest earnings report raise any warning flags?
The strength of the US dollar provided considerable headwinds for PG in the quarter to the tune of a negative 6% impact on revenues. Excluding the impacts of currency exchange, the company saw an organic sales increase of 7% driven by higher pricing and positive product mix. However, due to the foreign exchange impact, overall, PG grew revenue 1%, net income decreased 4%, and EPS were 2% lower.
| Revenue (in billions) | Net Income (in millions) | EPS . | |
| Q1 2022 | $20.3 | $4,112 | $1.61 |
| Q1 2023 | $20.6 | $3,939 | $1.57 |
| % Change | 1% | (4)% | (2)% |
Additional noteworthy developments during the quarter:
- The company returned $6.3 billion to shareholders via $2.3 billion of dividend payments and $4 billion of common share repurchases.
Looking ahead, PG reduces its guidance for fiscal 2023 revenue to be down 1-3% versus the prior fiscal year due the expect 6% head-wind from foreign exchange. The company maintained its organic sales growth outlook of 3-5%. EPS growth for the year is expected to be 0-4% compared to 2022.
Thesis
Why are we adding to our position in PG?
In the past PG’s business has proven to be quite resilient during recessions. The company’s performance over the last few quarters demonstrated that we can expect more of the same in the near future.
Therefore, we the current general drop in share prices across the entire market provides us with an opportunity to accumulate shares in a solid business at an attractive valuation and yield.
Previous Articles
- 2022 Week 24: Procter & Gamble (NYSE: PG)
- 2021 Week 20: Procter & Gamble (NYSE: PG)
- 2021 Week 16: Procter & Gamble (NYSE: PG)
Additional Research
Photo by Nathan Dumlao on Unsplash
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