Key Points
Although several others have track records that match P&G's, only one stock has a longer streak of annual dividend hikes.
Procter & Gamble's yield is still just so-so.
It has grown its payouts at a much faster rate than most other dividend stocks.
If you're looking for a well-proven dividend stock, consumer goods name Procter & Gamble (NYSE: PG) is about as good as they come, with 70 consecutive years of annual dividend hikes to its credit. Indeed, only one other company has a longer track record of uninterrupted yearly dividend increases. That streak isn't apt to end anytime soon, if ever.
But reliable dividend growth is only half the story. How much are income investors actually making with their positions in P&G?
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Procter & Gamble's forward-looking dividend yield currently stands at 3%, based on a quarterly payment of $1.0885 per share. A $25,000 position in the stock -- about 172 shares -- would produce just over $187 in dividend income per quarter, or just under $750 per year. That's not earth-shattering, but it's not bad either.
But those numbers arguably understate the total long-term potential that Procter & Gamble offers to patient investors. This company also boasts one of the better rates of dividend growth among blue chip dividend payers. Over the past 10 completed fiscal years, Procter's annual dividend payout has grown from $2.66 to $4.26 per share, and is currently running at an annualized pace of $4.35 per share. That's annualized growth of right around 4.8%, easily outpacing inflation as well as most other Dividend Kings' payment increase rates.
And this is important to investors looking for investments that will provide good income streams in the future, even if they don't need to take those payouts to supplement their budgets now. Establishing positions in quality dividend stocks early gives them time to grow their payments into something significant by the time you finally do need that income.
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Credit the nature of its business and the strength of its brands, which include Pampers diapers, Tide laundry detergent, and Bounty paper towels, just to name a few. The consistent marketability of these consumer products isn't likely to wane in the near or distant future, which is why you can reasonably count on P&G's continued dividend growth.
James Brumley has positions in Procter & Gamble. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.