The Best a Man Can Get?

Wealthy Retirement View in Browser Brought to you by The Oxford Club Wednesday, September 30, 2015 Why NORAD Is Moving Operations NORAD, the U.S. military command that scans the skies for airborne threats, is spending a near billion dollars to move communications back to their old Cold War Bunker in Colorado... here's why. The Safety Net: Is This 3.65% Yield the "Best a Man Can Get"? Kristin Haugk, Research Analyst, The Oxford Club Marc is out this week, but that doesn't mean we're canceling the week's dividend safety showdown. He has asked me to compose this week's Safety Net column in his stead. It may be hard to believe, but I love to clean. I also enjoy trying out all of the household products that show up on store shelves. This weekend, I decided to do some deep "autumn" cleaning. The household stalwarts I used provided me with the inspiration for this week's Safety Net evaluation. I want to show you the dividend safety of a 178-year-old manufacturer of brands consumers and investors alike have come to love and trust. Look in your laundry room, in your shower or under your kitchen sink, and you will likely find at least half a dozen brand-name products manufactured by Procter & Gamble Company (NYSE: PG). From Tide to Dawn to Pantene, the company's brands are ones that most of us use daily. An elite member of the Dividend Aristocrats, Procter & Gamble has been paying dividends for more than 125 years. It has raised its dividend for the last 59 consecutive years. The average raise has been 9%. But over the last five years, the tides have turned for the company. Growth nearly slowed to a halt as the company became bloated by several of its brand acquisitions. Recognizing the problem, the company brought back one of its time-tested leaders, A.G. Lafley. In 2013, he was re-elected as chairman, president and CEO. His plan: Focus on Procter & Gamble's stronger, more iconic and profitable brands. Procter & Gamble took a significant step toward executing its transition plan earlier this year when it sold its Duracell battery brand to Warren Buffett's Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B). It also sold its portfolio of beauty brands to Coty Inc. (NYSE: COTY) not long ago. But the transition hasn't been easy. And it has taken longer than management and most shareholders expected. Like most multinational companies, the strong dollar has negatively impacted Procter & Gamble's results. Investors have taken note, and many have cleaned Procter & Gamble out of their portfolios. Shares are down over 20% year-to-date. Procter & Gamble's stock now wears a 3.65% dividend yield. But with stagnant sales, divestitures and continued currency headwinds, how long will the dividend last? "It's Like Winning the Lottery!" - Lawrence L. According to an ABC News report, people are becoming "millionaires overnight." It's happening in Kansas, Pennsylvania, Texas, Oklahoma... All over the country. One man from a tiny town of 1,458 is now looking "to reap as much as $1 million per year." How are they doing it? Shockingly, it all comes down to an amazing 94-year-old man's invention. Go here to find out how his invention could hand you as much as $127,000 each year for 45 years. Let's run Procter & Gamble's dividend through the rinse cycle and see what comes out in the wash. Although sales actually declined 5% last year, free cash flow has not been shaved. In fact, it has continued to edge up. Free cash flow grew 7.54% to $10.9 billion in fiscal 2015 and is expected to rise another 3.77% this year. Over the last three years, free cash flow has gone up 16.65%. An important piece of the Safety Net formula is the free cash flow payout ratio. Last year, Procter & Gamble paid out $7.3 billion in dividends to shareholders. This gives the company a payout ratio of 67.03%. This year, shareholders expect to receive $7.5 billion in the form of dividends, giving Procter & Gamble a forward payout ratio of 64.66%. Both payout ratios are comfortably below the Safety Net's 75% cap. Procter & Gamble's payout ratio is a bit higher than it has been historically, but there is still plenty of wiggle room to protect the dividend in case free cash flow unexpectedly dips. The Safety Net has failed to find a chink in Procter & Gamble's dividend safety armor. Despite the slower-than-expected execution of its transition and the negative impact of the strong dollar, Procter & Gamble's dividend is safe. With a 125-year history, it may even be worthy of the company's famous Gillette razor slogan: "The best a man can get." Dividend Safety Rating: A Good investing, Kristin Click here to post a comment on WealthyRetirement.com If You're Worried You Don't Have Enough for Retirement... You're not alone. According to the 2013 Retirement Confidence Survey, fully 76% of Americans have saved less than $100,000 for retirement. And more than half have saved less than $25,000! Fortunately, there's now a "fast track" plan to help grow any portfolio - no matter how meager - from 6 to 21 times faster overall than most other investors. Find out how right here. Recent Articles From Wealthy Retirement Check the Driver, Not the Engine... by Steve McDonald Tuesday, September 29, 2015 The recent ups and downs in the markets have everyone focused on volatility. But the greatest risk to your money is not market prices or their movement. Read On... A $2,072 Dividend for Every Resident by Andrew Snyder Monday, September 28, 2015 Free money... $2,072 for every resident. Folks who live in one unique state know exactly what I'm talking about. Read On... 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