Smart Dividend Portfolio Edition #69: Dividend Dynasty
1
Dear Investor,
Welcome to the 69th edition of TipRanks’ Smart Dividend Portfolio & Newsletter.
1
1
Market-Moving News: July 14, 2025
Stock indexes fell on Friday, reversing mid‑week gains and closing in the red, as the tariff theme came back to haunt investor sentiment. The S&P 500 (SPX) was down 0.31% for the week, while the Nasdaq-100 (NDX) declined by 0.38% and the Dow Jones Industrial Average (DJIA) dropped 1.02%.
The S&P 500 and the tech-heavy Nasdaq100 hit record highs on Thursday, driven by Nvidia and other tech leaders, while the DJIA came close to its prior all-time high. However, Wall Street’s positive momentum came under pressure Friday as tariffs once again became the hot topic of conversation and investor nervousness spiked ahead of the first act of the Q2 earnings season, set to begin this week.
President Trump imposed 35% tariffs on Canadian imports not covered under the U.S.-Mexico-Canada agreement (USMCA). Before that, the president announced new tariffs – ranging from 20% to 50% – on more than 20 trading partners, scheduled for August 1 unless trade deals are reached sooner. The 50% tariff on copper imports, announced earlier in the week, also kept investors worried about the prospect of rising prices for industrial products.
Another point of concern was the ongoing trade negotiations with the European Union, with markets hoping for an agreement after both sides signaled progress. However, the deal apparently fell through, with the president on Saturday announcing a 30% levy on all imports from the bloc, as well as on goods arriving from Mexico. In a preemptive warning, the president cautioned the levied countries not to retaliate, as that would trigger additional tit-for-tat increases on top of the 30% tariffs. Due to these developments, futures are flashing red for Monday’s market open.
While the renewed tariff rhetoric pushed the indexes slightly down from their peaks, the reaction was incomparably milder than in April – and much weaker than any other subsequent trade-related dip since then. With the economy chugging along and large companies reporting better than expected earnings, the tariff theme has seemingly transformed into a “new normal” of elevated trade anxiety, keeping a lid on otherwise exuberant stock market activity.
Meanwhile, the tariff windfall is already here, with the Treasury Department reporting a record $26.6 billion in customs duties collected in June, producing a surprise $27 billion budget surplus for the month. Treasury Secretary Scott Bessent recently stated that the U.S. could collect up to $300 billion in tariff revenue by the end of 2025 as Trump’s trade policies take full effect. Economists expect tariff revenues to remain elevated for several years, with estimates ranging from $2.2 trillion to $2.8 trillion over the next decade if current policies persist. If that’s the case, it could reduce federal borrowing, cap the rise in national debt, and help service existing interest obligations.
Investors are now awaiting the official opening of earnings season, with the focus on how Trump’s tariff saga has affected major U.S. companies. At the moment, analysts don’t expect large earnings growth outside of the tech sector, but the few names that have reported so far suggest forecasts may have been too conservative. With tariff headlines weighing on sentiment for much of Q2, analysts may have overestimated their negative short-term impact on the corporate sector. On the other hand, if results disappoint, it could call pricing into question, especially if analysts’ estimates for Q3 and Q4 earnings don’t rise.
Although tariffs have had a limited impact on inflation thus far, that could change down the road. Thus far, the levies have mostly been absorbed by the supply chain or avoided through stockpiling ahead of implementation. If tariffs continue to ramp up, they will ultimately have to be passed on to consumers, as many industries don’t have wide enough profit margins to fully absorb them. The extent to which consumers will bear the tariffs is uncertain because supply chain dynamics are complex, but it’s safe to presume that inflation may drift slightly higher over the months ahead.
The Federal Reserve’s June minutes showed policymakers are at odds about the inflation threat and the direction of monetary policy. Although the majority is leaning towards a continued “wait and see” approach, some committee members are now open to cutting rates as soon as this month, while others don’t anticipate cutting rates at all in 2025.
While the tariffs, at least at their announced levels, could have some stagflationary effects by depressing growth and driving up inflation, other factors could counter this. Most economists and analysts agree that the newly approved “One Big Beautiful Bill” (OBBB) fiscal package would provide a modest boost to U.S. growth. While estimates vary, the baseline projection from the Congressional Budget Office (CBO) is that the OBBB will add an average of 0.5% to annual GDP growth over the next decade, with the largest boost – about 0.9% – coming next year. The growth would stem from deregulation, tax breaks, and business incentives, boosting jobs and investment. With the Fed eventually easing, the U.S. economy may see a meaningful boost in the next couple of years despite the tariffs.
1
1
1
This Week’s Quality Dividend Stock Idea
Procter & Gamble (PG) is a leading multinational consumer goods company specializing in the development, manufacturing, and marketing of branded products across personal care, home care, and hygiene categories. Its diverse portfolio spans five key segments, including Fabric & Home Care, Baby, Feminine & Family Care, Beauty, Grooming, and Health Care. With operations in over 70 countries and sales in 180, PG is one of the world’s largest consumer goods companies, recognized for its innovation, market leadership, and long-standing focus on product performance and value.
1
Enduring Legacy
Procter & Gamble’s journey began in 1837, when William Procter and James Gamble founded a modest soap and candle business in Cincinnati, Ohio. Over time, this small operation transformed into one of the world’s largest and most influential consumer goods companies, driven by a long-term strategy centered on product innovation, brand building, and global expansion.
The company’s early success was marked by key innovations such as the introduction of Ivory soap in 1879 and Crisco in 1911. In the early 20th century, P&G pioneered modern brand management and market research, laying the foundation for consumer marketing as we know it today. These capabilities allowed the company to develop a suite of trusted household and personal care brands, fueling its growth throughout the mid-1900s.
P&G’s global footprint expanded significantly in the 1980s and 1990s, with strong revenue contributions from its growing presence in Europe, Asia, and Latin America. In the early 2000s, the company executed several major acquisitions, including Clairol and Wella, and in 2005, it completed its largest deal to date, acquiring Gillette for $57 billion. The transaction brought top grooming brands such as Braun, Venus, and Gillette into P&G’s portfolio, further solidifying its leadership in personal care.
In the mid-2010s, P&G launched a sweeping overhaul of its portfolio aimed at streamlining operations and sharpening strategic focus. The company divested more than 100 non-core or underperforming brands, concentrating resources on high-margin categories with stronger growth potential. This transformation, along with supply chain improvements and advancements in digital commerce, helped reignite earnings growth.
In 2018, P&G continued its expansion in the healthcare space by acquiring Merck KGaA’s consumer health division for approximately $4.2 billion. The acquisition added several over-the-counter healthcare brands, including Femibion, Nasivin, and Neurobion, strengthening P&G’s position in the global wellness market.
Currently, the company is not targeting large-scale M&A, but favors targeted acquisitions such as Native and Zevo, which have delivered strong post-acquisition growth.
Today, P&G has a market capitalization of nearly $368 billion, trailing twelve months’ revenues of around $84 billion, and is ranked #51 on the 2025 Fortune 500 list.
1
Brand Power
Procter & Gamble generates revenue through the creation, manufacturing, marketing, and distribution of consumer products across ten core categories: Fabric Care, Home Care, Baby Care, Feminine Care, Family Care, Grooming, Hair Care, Skin and Personal Care, Oral Care, and Health Care. These products are sold in many countries via mass merchandisers, e-commerce platforms, membership clubs, pharmacies, grocery chains, and direct-to-consumer channels.
The company reports results through five key business segments: Beauty, Grooming, Health Care, Fabric & Home Care, and Baby, Feminine & Family Care. It holds leadership positions across most categories. In Beauty, P&G owns a 20% global share in hair care, led by Head & Shoulders and Pantene. Olay ranks among the top global facial care brands with a 5% share. In Grooming, it dominates with a 45% share, including over 60% in blades and razors through Gillette and Venus, and 25% in male electric shavers via Braun.
In Health Care, P&G holds the #2 global position in oral care with 20% share, driven by Crest and Oral-B, and leads in personal health care across respiratory, digestive, sleep, and pain relief segments with brands like Vicks and Metamucil. Fabric & Home Care is its largest segment, where P&G commands a 35% share in fabric care (Tide, Ariel, Downy) and 25% in home care (Febreze, Dawn, Cascade, Swiffer).
The Baby, Feminine & Family Care segment also leads globally. Pampers holds over 20% global share, Always and Tampax exceed 25% in feminine care, and Always Discreet controls about 15% of adult incontinence. In North America, Bounty and Charmin hold over 40% and 25% market shares, respectively, in family care.
For the first nine months of FY25, P&G reported organic growth in eight out of ten categories, reflecting its strong brand equity, innovation, and focus on operational excellence aimed at delivering sustainable growth.
P&G also benefits from scale and an integrated global supply chain. Productivity improvements are reinvested in brand-building and innovation, fueling margin expansion and earnings growth. Its leadership across key segments enables pricing power and operational efficiency. Walmart, P&G’s largest customer, accounted for about 16% of FY24 sales, underscoring the strength of their long-standing retail partnership.
1
Strategic Reset
As part of its efforts to enhance agility and operational efficiency amid global uncertainties, P&G is undertaking a focused restructuring initiative alongside its long-term growth strategy. P&G’s integrated growth framework is built on five pillars: portfolio management, superiority, productivity, constructive disruption, and organizational agility. These pillars continue to guide the company’s transformation and help sustain momentum in challenging market conditions. Portfolio management remains a top priority. The company has exited lower-performing brands like Vidal Sassoon in China and restructured operations in Argentina and Nigeria to focus on core growth regions. The initiative aims to increase agility, accelerate decision-making, and strengthen the company’s ability to manage trade shifts and inflationary pressures.
In June 2025, it announced a two-year restructuring plan to improve efficiency and reduce costs amid inflation, currency volatility, and geopolitical uncertainty. The plan includes cutting up to 7,000 non-manufacturing roles (15% of office workforce) across FY25–26. The restructuring also involves adjusting capacity through facility relocations and optimizing supply chains. The company’s Supply Chain 3.0 initiative aims to achieve 98% on-shelf availability through automation, predictive planning, and collaboration with digital retailers.
The company’s product superiority is highlighted by recent innovations across oral care (Crest 3D White, Oral-B iO), fabric care (Tide OxyBoost, Gain Odor Defense), grooming (Gillette Labs), feminine care (Tampax), and home care (Febreze, Swiffer, Cascade) reinforcing its focus on superior performance.
Productivity remains a key earnings driver. In Q3 FY25, productivity improvements contributed 280 basis points to operating margin growth, helping fund innovation and offset input cost and currency headwinds. P&G is also advancing constructive disruption through AI-powered media buying, programmatic shelf management, and digital investments in manufacturing and supply chain capabilities.
To support long-term growth, P&G has identified $20–$25 billion in market expansion potential. In North America, it sees a $5 billion opportunity by reaching underserved households. For example, Tide and Bounty are present in only 40% and 30% of U.S. homes, respectively. In Europe, it sees a $10 billion opportunity by raising per capita usage. In emerging markets, it targets $10–$15 billion in upside by increasing consumption levels to those seen in Mexico, supported by income growth and lower competitive intensity.
However, challenges persist. Growth in developed markets has slowed – U.S. category growth declined from 4% to 1%. Tariff-related cost pressures are rising, with Q4 impacts estimated at $100–$160 million in a single month and projected to reach $1–$1.5 billion annually from FY26, driven by U.S. tariffs on Chinese imports and U.S. exports to Canada. Despite these headwinds, P&G expects low-to-mid-single-digit sales growth and mid- to high-single-digit EPS growth over the next 2–3 years, supported by innovation, brand strength, and strategic discipline.
1
Resilient Growth
Procter & Gamble continues to demonstrate financial resilience through disciplined execution and productivity gains. Over the past half-decade, P&G’s revenues have grown at a CAGR of 3.6%, while its core EPS1 has grown by 6.5% over the same period. This growth has been fueled by consistent organic sales growth, driven by strategic pricing, operational discipline, and brand strength.
In the third quarter of FY25, P&G reported net sales of $19.8 billion, down 2% year-over-year, primarily due to unfavorable foreign exchange and category mix. These revenues fell short of analysts’ estimates. However, organic sales grew 1%, driven by higher pricing across key segments like Grooming, Health Care, and Beauty. Net earnings rose slightly to $3.8 billion, while diluted EPS and core EPS both increased 1% to $1.54, beating Street expectations.
Despite macroeconomic and geopolitical pressures, P&G maintained strong profitability and cash generation. Operating income in Q3 grew 2% year-over-year to $4.56 billion, and operating cash flow reached $3.7 billion for the quarter. For the first nine months of fiscal 2025, the company posted net earnings of $12.4 billion on net sales of $63.4 billion, reflecting steady performance supported by pricing and productivity savings.
P&G’s adjusted free cash flow productivity2 was 75% in Q3, with full-year guidance of 90%, consistent with its long-term targets. Capital expenditures totaled $2.78 billion for the nine months, aligned with its plan to reinvest 4–5% of annual sales into capacity and innovation.
The company ended Q3 with $9.1 billion in cash and total debt of $34.1 billion. Its debt-to-equity ratio stood at ~0.65x, highlighting a prudent capital structure that is slightly higher than the sector median. This ratio reflects P&G’s disciplined capital management in a mature industry. P&G holds investment-grade credit ratings of “AA-” from S&P and “Aa3” from Moody’s, both with stable outlooks.
P&G is expected to announce its Q4 results on July 29, and analysts expect the company to report adjusted EPS of $1.42, an estimated increase of 1.4%% year-over-year, while revenues are projected to rise by 1.5% year-over-year to $20.8 billion.
Looking ahead, P&G expects core EPS to grow 2–4% for FY25, reaching $6.77 at the midpoint, despite projected headwinds from commodity prices foreign exchange, and interest expenses. It estimates FY25 sales to be in line with the prior year and forecasts organic sales growth of 2% year-over-year. P&G anticipates after-tax headwinds of approximately $200 million each from commodity costs and unfavorable foreign exchange in fiscal 2025. Combined, these pressures are projected to reduce earnings by $0.16 per share.
P&G plans to spend 4–5% of FY25 net sales on capital investments while targeting 90% adjusted free cash flow productivity. The company expects to return up to $17 billion to shareholders, including approximately $10 billion in dividends and $6–7 billion in share repurchases.
—
1- Core EPS is a measure of the Company’s diluted EPS excluding items that are not judged by management to be part of the Company’s sustainable results or trends. Management views this non-GAAP measure as a useful supplemental measure of Company’s performance over time.
2- Adjusted free cash flow productivity is defined as the ratio of adjusted free cash flow to net earnings. It is a useful measure to help investors understand P&G’s ability to generate cash.
1
Income Engine
Procter & Gamble has a long-standing history of returning capital to shareholders through a disciplined mix of dividends and share repurchases. Backed by strong earnings quality and robust free cash flow, this approach underscores management’s confidence in the company’s ability to generate consistent cash flows across business cycles.
The company is an elite Dividend King, paying dividends for 135 years and increasing them for 69 consecutive years. Over the past decade, the company has grown its dividend at a 4.85% annual rate. Most recently, it raised its quarterly dividend by 5% to $1.06 per share, offering a yield of 2.67%, which is above the consumer defensive sector average of 2.45%. Based on adjusted earnings, P&G returns 60.4% of its profits to shareholders.
This sustained commitment to capital returns is supported by the company’s high-margin portfolio, operational efficiency, and broad global presence. In the third quarter alone, P&G paid $2.4 billion in dividends and repurchased $1.4 billion worth of common stock. These buybacks are conducted under the company’s authorized repurchase program, which allows it to adjust capital allocation based on market conditions.
For the first nine months of FY25, P&G generated adjusted free cash flow3 of $10.6 billion, with a free cash flow productivity ratio of 80%, well within its long-term target. The company’s financial strength is further highlighted by its return metrics, as its ROE and ROA are among the top 10% in the industry, while its ROIC ranks within the top 30%.
Despite this solid foundation, P&G shares have declined by nearly 6% over the past year, reflecting operational headwinds, cautious guidance, and ongoing cost and currency pressures. The stock currently trades at a trailing P/E of 17.3x and a forward P/E of 16.6x, both at a premium to the sector median but still below its five-year averages. Nevertheless, on a relative basis, P&G remains moderately valued compared to peers like Colgate-Palmolive and Church & Dwight, based on its trailing and forward P/E, P/CF and EV/EBITDA metrics.
Analysts remain optimistic, with price targets implying an upside of nearly 10%, and some estimates going as high as 21%. This outlook is primarily supported by the company’s cost-saving initiatives and operational improvements aimed at sustaining earnings growth. On a discounted cash flow (DCF) basis, the stock appears to be undervalued by approximately 25%.
—
3- Adjusted free cash flow is defined as operating cash flow less capital expenditures and excluding payments for the transitional tax resulting from the U.S. Tax Act.1
1
Investing Takeaway
Procter & Gamble stands out as a reliable income-generating stock, thanks to its consistent cash flow, high-margin portfolio, and disciplined capital allocation. Its long-standing commitment to returning capital through both dividends and share repurchases reflects strong financial stewardship and management confidence. P&G’s global brand leadership and operational efficiency help it navigate inflationary pressures and currency volatility, while still delivering shareholder value. The company’s focus on premium innovation, productivity improvements, and targeted restructuring positions it for long-term earnings stability. For income-focused investors, P&G offers a compelling mix of dividend consistency and capital preservation. Its investment-grade credit ratings, balanced capital structure, and strong free cash flow reinforce its status as a dependable dividend payer across market cycles.
1
Dividend Investor Portfolio
1
Portfolio News
▣ BlackRock (BLK) is scheduled to announce its second-quarter results on July 15, with analysts projecting earnings of $10.77 per share. This reflects a sequential decline of 4.7%, even as revenue is expected to rise 4.2% from the prior quarter to approximately $5.5 billion. Looking ahead, the asset management giant anticipates core general and administrative (G&A) expenses to grow in the mid-to-high single-digit range in fiscal 2025. This outlook excludes costs related to the integration or operations of HPS Investment Partners, the private credit firm BlackRock recently acquired in a strategic push to expand its alternatives platform. BlackRock also reaffirmed its capital return strategy, targeting $375 million in share repurchases each quarter through the rest of 2025, consistent with its earlier guidance.
▣ JPMorgan Chase (JPM) is set to report its second-quarter results on July 15, with Wall Street expecting a notable year-over-year decline in earnings and revenue. Analysts forecast earnings of $4.48 per share, down 26.8% from the same quarter last year, while revenue is projected to fall 12.5% to approximately $43.9 billion. The expected drop reflects tough comparisons against a particularly strong performance in the prior year, along with a more challenging macroeconomic environment. For fiscal 2025, the banking giant continues to guide for net interest income of around $94.5 billion, although management noted that the final figure will depend on interest rate movements, customer behaviour, and broader economic conditions. Meanwhile, the company has maintained its full year adjusted expense forecast at $95 billion. Additionally, JPMorgan reaffirmed its card net charge-off rate outlook of about 3.6%, indicating stable credit quality expectations despite ongoing consumer headwinds.
▣ PepsiCo (PEP) is scheduled to release its second-quarter earnings on July 17, with analysts projecting a year-over-year decline in both profit and revenue. The company is expected to post earnings of $2.03 per share, down nearly 11% from the prior year, on revenues of approximately $22.23 billion, a modest 1.2% decrease. Looking ahead to fiscal 2025, PepsiCo anticipates a low single-digit increase in organic revenue, reflecting stable underlying demand across its global snack and beverage portfolio. However, the company expects core earnings per share to decline 3% year-over-year to $7.91. This outlook reflects ongoing headwinds, including increased supply chain costs, partly due to tariffs, alongside continued macroeconomic uncertainty and a cautious consumer spending environment.
▣ EOG Resources’ (EOG) ex-dividend date is set for July 17, and the dividend is scheduled to be paid on July 31.
1.
Recent Trades
None at the moment, although we are considering adding a stock to our portfolio when the market conditions allow for an attractive entry point. Stay tuned.
1
1
Portfolio Attributes
| Dividend Portfolio Yield |
Expected Dividend Growth | Expected Annual Income |
| 4.00% | +6.66% | $6,058.30 |
| Yield-on-Cost Adjusted, Weighted |
Average Analyst 12-Month Growth Outlook | 10K Per Stock at the Time of Purchase |
Current Portfolio
| Name | EX-Dividend Date | Payment Date | Yield on Cost | Annual DPS |
| Automatic Data Processing (ADP) | Sep 16, 2025 | Oct 02, 2025 | 2.46% | $6.16 |
| Amgen (AMGN) | Aug 18, 2025 | Sep 09, 2025 | 3.27% | $9.52 |
| BlackRock (BLK) | Sep 09, 2025 | Sep 23, 2025 | 2.61% | $20.84 |
| Bank of Nova Scotia (BNS) | Oct 02, 2025 | Oct 29, 2025 | 5.98% | $3.2 |
| EOG Resources (EOG) | Oct 17, 2025 | Oct 31, 2025 | 3.06% | $3.92 |
| ExxonMobil (XOM) | Aug 15, 2025 | Sep 10, 2025 | 3.64% | $3.96 |
| IBM (IBM) | Aug 11, 2025 | Sep 10, 2025 | 3.14% | $6.72 |
| JPMorgan Chase (JPM) | Oct 07, 2025 | Oct 31, 2025 | 3.43% | $6.00 |
| Kroger (KR) | Aug 15, 2025 | Sep 01, 2025 | 3.08% | $1.40 |
| LyondellBasell (LYB) | Aug 26, 2025 | Sep 03, 2025 | 5.74% | $5.48 |
| PepsiCo (PEP) | Sep 09, 2025 | Sep 30, 2025 | 3.64% | $5.44 |
| Philip Morris (PM) | Sep 25, 2025 | Jul 17, 2025 | 6.06% | $5.40 |
| Qualcomm (QCOM) | Sep 05, 2025 | Oct 09, 2025 | 2.36% | $3.56 |
| VICI Properties (VICI) | Sep 18, 2025 | Oct 06, 2025 | 5.22% | $1.73 |
| Verizon (VZ) | Oct 09, 2025 | Nov 04, 2025 | 6.09% | $2.71 |
NameEX-Dividend DatePayment DateYield on Cost Annual DPS
1
1
1
Click here for more stock market analysis from TipRanks Macro & Markets research analyst Yulia Vaiman
1
Disclaimer
The information contained in this article represents the views and opinions of the writer only, and not the views or opinions of TipRanks or its affiliates and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy, or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment, and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices, or performance.
