Proctor & Gamble (P&G) successfully navigated inflation impacts in the third quarter to post revenue and earnings for the quarter that beat analyst expectations but gave guidance that there are difficult times ahead. The earnings beat from P&G could be good for dividend ETFs that hold the company.
By raising prices, the major consumer goods company was able to come out ahead for the quarter, reporting $1.57 earnings per share compared to the expectation of $1.54 and revenue of $20.61 billion on expectations of $20.28 billion, reported CNN. The price increases have resulted in a demand reduction, however, leading to volume decreases in the most recent two quarters but P&G leadership stands by the decision as the right one.
“We feel very good about the consumer reaction to our price increases because we don’t see any major trade downs,” Andre Schulten, CFO of P&G, told reporters on a call.
P&G is yet another major corporation that is signaling troubled times ahead in its forward guidance for 2023, the underlying theme of a surprisingly positive earnings season thus far. The company anticipates a much larger impact from the strength of the U.S. dollar on foreign currency in 2023 and that it will cost the multinational corporation a revised $1.3 billion this year, an increase of $400 million from previous estimates last quarter.
Winning segments included personal healthcare, driven higher by early and active cold and flu season this year; and skin, personal care, and grooming which includes major brands like Venus and Gillette razors. Challenges arose from a reduction in laundry detergent due to supply chain constraints that have since been resolved, and 2% of the volume decrease in the third quarter was due to the company continuing to reduce its Russian exposure.
Investing in P&G With WisdomTree’s Dividend ETFs
- The WisdomTree US Quality Dividend Growth Fund (DGRW) invests in large-cap U.S. equity companies that are growing their dividends and applies both quality and growth screens to securities. The fund seeks to track the WisdomTree U.S. Quality Dividend Growth Index, a fundamentally weighted index based on dividend projections for the next year, which screens companies for long-term growth expectations, return on equity, and return on assets. P&G has a 3.24% weight within the fund and management fees of 0.28%.
- The WisdomTree U.S. LargeCap Dividend Fund (DLN) offers investors seeking dividend-paying companies exposure to the core U.S. large-cap equity securities. It’s a fund that can be used to either replace or complement a large-cap value or dividend strategy and seeks to track the 300 biggest companies by market cap and dividend weights based on projected dividends over the upcoming year. P&G has a 2.06% weight within the fund and management fees of 0.28%.
- The WisdomTree U.S. Total Dividend Fund (DTD) invests in companies from all market caps that pay dividends within the U.S. equity market. The fund seeks to track the WisdomTree U.S. Dividend Index, a fundamentally weighted index based on dividend projections for the next year, and is comprised of U.S. companies that pay dividends regularly. P&G has a 1.82% weight within the fund and management fees of 0.28%.
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