Is China Dragging Down This Dow Jones Dividend King Stock?

Procter & Gamble (PG), a Dow Jones Industrial Average (^DJI) component and a Dividend King with 68 consecutive years of dividend increases, has faced challenges in its operations in China. The company's second-quarter fiscal 2025 results showed a return to volume growth and reaffirmed full-year fiscal guidance, but the performance in China remains a concern. This article explores whether China is dragging down PG's stock and what the company is doing to address these challenges.



PG's operations in China have been a mixed bag in recent years. In the first quarter of fiscal 2025, the company saw flat overall volume and negative volume growth in three of its five segments. The Greater China, Asia, Middle East, and Africa region weighed heavily on the business, with a 7.5% decline in organic sales growth (Procter & Gamble, 2025). However, the company's performance in China showed signs of improvement in the second quarter, with organic sales declining 3% compared to a 15% decline in the previous quarter (Procter & Gamble, 2025).

PG's CEO, Jon Moeller, acknowledged that the company is still not out of the woods in China, but he expressed confidence that the situation will continue to improve. The company is implementing product innovations and changing its business model in China to adapt to changing consumer preferences and market conditions (Procter & Gamble, 2025).



PG's dividend payouts have remained strong despite the challenges in China. The company has a history of 68 consecutive years of dividend increases and has maintained a strong dividend yield. In fiscal 2024, PG paid a dividend of $3.08 per share, up from $2.92 in fiscal 2023 (Procter & Gamble, 2024). However, the company's dividend growth streak could be at risk if the challenges in China persist and negatively impact its overall financial performance.



PG's management has adapted its strategies and processes in China to improve its product pipeline and distribution, focusing on innovation, localization, and better control over its supply chain. The company has adjusted its product pipeline to meet changing consumer preferences in China, innovated in core brands, and implemented a new distributor channel strategy to improve its distribution and control (Procter & Gamble, 2025).

Despite these adaptations, China continues to be a weak region for PG, with volume growth of -6% in beauty products. While the company is confident that the situation will improve, the challenges in China could still impact its overall financial performance and dividend payouts.

In conclusion, while PG's operations in China have shown signs of improvement, the region remains a concern for the company. The challenges in China could potentially drag down PG's stock and put its dividend growth streak at risk. However, the company's management is taking steps to address these challenges and adapt to the changing market conditions. Investors should monitor PG's performance in China and its overall financial results to assess the potential impact on the company's dividend payouts and stock price.