I Sold out completely of The Procter & Gambel Company (PG)
15 shares @ $120.48 on 8/28/2019.
This decreased my forward 12-month dividend income by $44.70 to a total of $9,307.96
I also updated my portfolio page to reflect the change.
I do not sell a company very often. My last sell was a little over 8 months ago. I sold Clorox (CLX) the same reason why I sold PG.
PG is overvalued.
Currently, the company has a PE ratio of 26.61 where its 10-year PE average is 20.15. Another indicator of overvaluation I like to look at is the companies dividend yield. PG has a dividend yield of 2.44% where its 5-year average is 3.1%
CRFA is expecting earnings for the next three years to grow at a 5% rate. This is a modest growth for this big company. I would be very happy with this kind of growth from a safe company like PG. However, since the price of the stock is so high, there is very little price appreciation in my view going forward.
The next reason why I sold PG, is that I saw a great opportunity to buy a very undervalued company, has a high dividend yield, and great growth potential.
I find PG to be overvalued, and I recommend it as a Sell at this time. I have a fair value price at $78.54. This means that PG is 52% overvalued based on today’s price of $119.75 (9/16/2019).
Overall, I am very happy with this move. PG was a long time holding of mine. I think it might have been one of the first 10 companies I bought when I first started in 2013. I do plan to own the company in the future once the valuation makes sense.
What do you think about the company? Plan on owning it or already do? or why not? Do you think this was a good move?
Image by Stuart Miles at FreeDigitalPhotos.net