Procter & Gamble Has Raised Its Dividend for 70 Straight Years. Here's Why That Matters in a Sell-Off

Procter & Gamble (NYSE: PG), one of the world's largest consumer staple companies, has raised its dividend annually for 70 consecutive years. That makes it a Dividend King, an elite company that has raised its payout for at least 50 straight years.

Today, P&G's forward yield of 2.6% might not seem impressive compared to the 10-Year Treasury's 5% yield. But over the past 10 years, P&G delivered a total return of nearly 150% with dividends reinvested. Over the past 30 years, it generated a total return of 1,310%. Let's see why P&G consistently grew and why its resilience will matter during the next market crash.

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Why is P&G a resilient stock?

Over the past seven decades, the U.S. has experienced ten official recessions. Yet P&G resisted those downturns because it sells essential household and personal care products.

P&G shrunk its portfolio from around 180 brands in 2014 to 65 today. Roughly 20 of those brands -- including Tide, Downy, Dawn, Cascade, Pampers, Luvs, Tampax, Bounty, Charmin, Head & Shoulders, Pantene, Olay, SK-II, Crest, Oral-B, Vicks, Pepto-Bismol, and Gillette -- generate more than $1 billion in annual sales.

By streamlining its business and focusing on those higher-growth brands, P&G steadily grew its organic sales and core EPS. But over its past few fiscal years (which ended in July of each calendar year), its top- and bottom-line growth cooled off.

Data source: P&G. (Fiscal year ends in July of the calendar year)

Like many of its industry peers, P&G attributed that slowdown to inflationary headwinds for consumer spending. It's raised its prices to offset slowing volume, but it still struggled to grow in China and North America as macro headwinds intensified.

However, P&G's free cash flow (FCF) still grew 8% to $15.1 billion in fiscal 2026 and easily covered its $10.2 billion in dividend payments. It spent another $5.0 billion on share buybacks during the year, returning over 100% of its FCF to its investors.

For fiscal 2027, P&G expects its organic sales to rise 1%-3% and its core EPS to grow 0%-3%. It plans to pay out over $10 billion in dividends and spend another $5 billion on buybacks. That stabilization should be driven by additional price hikes, the premiumization of its classic brands (Pampers, Pantene, Tide, and Gain), and its growth in China and Latin America.

At $160, P&G trades at 23 times the midpoint of its core EPS forecast for fiscal 2027. That multiple is a bit high relative to its growth potential, but it could maintain that premium valuation as long as rising rates and yields drive investors toward defensive stocks. It should also easily recover from the next market crash.

Leo Sun has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.