Dividend Keeper: Procter & Gamble

Shares of Procter & Gamble (NYSE: PG ) have held up relatively well during the
market plunge. Its loss was about 9.2%, compared to a 15% drop in the Dow. Then
again, the company does have loyal shareholders. After all, Warren Buffett's
Berkshire Hathaway (NYSE: BRKA ) owns 78 million shares, and based on his latest
comments, he is still bullish on the prospects for America. So, it's a good
bet he'll hold onto his shares of P&G – if not buy more. Keep in mind that
the company has more billion-dollar brands than any other company in the world.
These include Head & Shoulders, Olay, Pantene, Gillette, Crest, Ace, Downy,
Duracell and Pampers. Because of this premium portfolio, P&G has the ability to
maintain or grow market share. Yet P&G is not resting on its laurels. During the
past year, it has spent $2 billion in research and development, which is up over
the past couple years. Thus, it should be no surprise that the company continues
to launch innovative products. But P&G also realizes that it must leverage
partnerships. For example, the company recently teamed up with Teva
Pharmaceuticals (Nasdaq: TEVA ) to focus on healthcare products and
distribution. No doubt, P&G does face some headwinds, such as rising commodities
prices. For the past year, these costs came to about $1.8 billion $1 billion
more than forecasted. However, in light of the recent drop in oil prices, there
may be less pressure going forward. P&G also has the advantage of a global
logistics footprint, which makes it easier to negotiate with suppliers. There
will still be issues with the weakening global economy, and the Fed's
statement on Tuesday was certainly chilling. There are also signs that P&G is
seeing a falloff in consumer demand. In the latest quarterly report, the company
provided a somewhat wider guidance for fiscal 2012, with growth at 6% to 10% for
earnings. But even if the company comes in on the low end, cash flow will still
be substantial. In fact, the company may boost its top line with some
acquisitions, especially since valuations are much lower now. Of course, P&G
will continue to use its cash flow for its healthy dividend as well as share
buybacks. Consider that the company has returned $35 billion to shareholders
over the past three years. So with a strong global platform, healthy profits and
a strong dividend yield of 3.5%, P&G is certainly an attractive option for
investors. Tom Taulli's latest book is " All About Short Selling " and he
has an upcoming book called " All About Commodities ." You can find him at
Twitter account @ttaulli . He does not own a position in any of the stocks named
here.