Hate Laundry Love Dividends

Admit it. Most of us hate doing the laundry. How much fun can you have throwing a bunch of dirty clothes into a washer and dryer and then sit and fold each item? Well, as a dividend investor laundry time might be a little more exciting knowing that you are getting paid to do your laundry with dividends represented in each and every load. Just like my previous articles about dividends at breakfast time or dividends from your bathroom, dividends can come from your laundry room too! Think about the machines used to wash your clothes and the various detergents and dryer sheets you use. When looking at laundry along those lines a full hamper might actually start to look good to you. Let’s examine a typical laundry load, dividend style.

 

All those dirty clothes need to go into a washer and dryer. Let’s start by taking a look at appliance manufacturer General Electric Company (GE). GE has been a dividend stalwart for many decades and even though it has cut its dividend as a result of the stock market sell-off in 2008 – 2009 it has nonetheless returned to a policy of increasing dividends year after year. GE currently offers a very generous 3.30% with a moderate payout ratio of 52.4% making this dividend currently safe. On a PE scale GE is at 19.1 which pretty much means its fully valued by todays market standard even though it is slightly below its peers.

 

Another famous laundry appliance manufacturer is Whirlpool Corp. (WHR). Famous for many of its namesake machinery items WHR currently offers shareholders a decent yield of 2.10% with a low payout ratio of 24.4%. Having raised its dividend the last three years WHR can definitely continue to afford further increases with its current cash flow. From a valuation perspective WHR currently has a PE of 15.7 which is low by S&P standards however in line with its peers which might suggest that WHR is fully valued at current prices.

 

From the heavy machinery that cleans your clothes to the stuff that makes your clothes smell good and come out feeling fresh. Let’s examine some of the biggest names in detergents. First up, The Procter & Gamble Company (PG). From the makers of Tide, Gain, Ariel, Cheer and Bounce, PG is a company that is widely held and really needs no introduction. One of the classic dividend aristocrats with a very famous shareholder named Warren Buffett, PG has managed to raise its dividend every year an amazing 57 years. Currently yielding a generous 3.20% with a moderate payout ratio of 61.4%, PG will no doubt continue adding shareholder and dividend growth value to many portfolios around the world. Slightly rich at current prices with a PE of 21.4 you might want to wait for a more attractive opportunity to jump into PG shares if starting out a new position.

 

Finally, from the makers of Surf, Wisk, all and more, we have Unilever plc (UL). Another great dividend company with many billion dollar brands in its portfolio. While UL divested a lot of its North American fabric care business back in 2008 to Sun Products Corporation, it continues to sell detergents under other brand names outside the United States. UL currently offers a fairly high yield of 3.47% with a relatively high payout ratio of 70.6%. While there is enough cash flow to cover current dividend payouts future increases may be small going forward. UL’s PE currently stands at 19.9 which is pretty much in line with the market as whole suggesting that UL, at current prices, is more than likely fully valued.

 

Of course, one more mention of an awesome dividend stock that is in almost every laundry room, The Clorox Company (CLX). Another divided stalwart that is found in many dividend growth portfolios CLX currently yields a generous 3.30% with a moderate payout ratio of 68.4%. This may explain the recent lackluster dividend raise CLX just gave this month. On a PE scale CLX is 20.7 which makes it a bit high relative to the S&P but in line with its peers. As you know most consumer stocks are pretty expensive and CLX is no exception.

 

Next time you are doing a load of laundry ask yourself if you are getting paid by any of the companies represented here.

 

Disclosure: Long GE, PG, CLX

14 thoughts on “Hate Laundry Love Dividends

    • Hi PIP,

      WHR has been paying dividends every year for several decades and while not a traditional dividend grower the returns from dividends have made WHR a good long term holding. Thank you for commenting.

    • Hi DD,

      If you just know where to look you can find a silver lining in almost anything… even laundry. Thanks for stopping by!

  1. Div Hut,

    Great post! Hopefully this will help others “re-consider” their hate for laundry : ) Never hurts that all the products/machines being used are dividend paying, dividend increasing stocks! Great article.

    -Lanny

    • Hi DD,

      Thank you for the compliment. It just goes to show that dividends are really all around us and that dividend investing themes are easy to spot and invest in. A lot of high quality companies surround us on a day to day basis. Thanks for commenting.

    • Hi DGJ,

      Glad you enjoyed the post. Between GE and PG I think millions are doing the same laundry routine as you. That’s the point of owning great long term dividend companies. Thanks for stopping by!

    • Hi Dave,

      I sure do. Just didn’t mention good old CLX. I’ll have to add them as an honorable mention. Good call!

  2. Since it somewhat ties into the theme of your post, I hate doing dishes too. πŸ˜‰

    3 of the 4 stocks you’ve mentioned are on my watch list (all except WHR). At current prices, GE looks most attractive to me with P/E still under 20, an attractive yield, and decent payout ratio. Hope to add some on a dip. Thanks for sharing. By the way, love how you create a theme for these posts. Makes it easy for everyone to relate. πŸ™‚

    Wishing you continued success in your journey! AFFJ

    • Hi AFFJ,

      Dishes, laundry, cleaning… some chores and our disdain for them just seem to transcend all cultures, income levels and education. Funny how some things unite us. I’m glad you like my articles and how I try to tie in a theme. As you can see it’s easy to find creative ways to invest in quality companies if you just know where to look. No need to be up to date with the latest dot com or bio-tech. Just stick with good old fashion everyday type themes that are used globally and you’ll be OK. WHR doesn’t seem to be so widely held but it does have a long dividend history spanning several decades. I also like GE these days. I would prefer to see it around $25 but these days most high quality names are high priced. Also, I look forward to the spin off from GE of its financial division Synchrony Financial (SYF). Thanks for stopping by.

  3. Hi DivHut,

    I ‘enjoyed the opportunity’ to do laundry today, although I found that I only have generic laundry products in the cupboard. Of your list I own PG although the washer and dryer (and the ones before it) are Whirlpool so hopefully I’m helping a dividend for someone else out there πŸ™‚

    Keep up the themed posts – I’m enjoying them and wondering if I shouldn’t just start classifying my portfolio by room rather than market sector! πŸ™‚

    • Hi DL,

      Thanks for the encouragement regarding my posts. Personally, I find it fun and enjoy writing about stocks in this manner. I hope to inspire new readers and investors by highlighting stocks in a fun and relatable manner. Going forward I plan to venture out of traditional rooms in the house. Appreciate your comment.

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