While Procter & Gamble (NYS: PG) may set the golden standard for dividend aristocracy, there are good reasons to hold off on this company today. Despite 56 years of dividend hikes, P&G's earnings haven't been able to keep pace in recent quarters, and the company may have a more difficult time meaningfully hiking their payouts each quarter. The company is in need of some earnings adrenaline, but they're looking in the wrong places: internal cost-cutting.
Like any mega-cap company, P&G probably has a lot of fat that they could trim to grow earnings a bit, but you can only go so far with a strategy like that. Instead, the company should be focusing on growing their top line with new high-margin personal care products. It won't be easy, but it may be one of the best ways to sustain their sterling reputation.
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The article 1 Incredible Dividend to Hold Off On originally appeared on Fool.com.
Austin Smith owns shares of Unilever. The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend Kimberly-Clark, The Procter & Gamble Company, and Unilever. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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