Procter & Gamble Hygiene and Health Care Faces Dividend Risks Ahead of Ex-Dividend Date

Procter & Gamble Hygiene and Health Care Limited (NSE:PGHH) is about to go ex-dividend in three days. This means that investors need to purchase shares before September 1st to be eligible for a dividend payment on October 6th.

The company's next dividend payment will be ₹60.00 per share, which brings the total payment over the last 12 months to ₹230 per share. The trailing yield is around 2.8% based on the current share price of ₹8102.50.

While dividends are a major contributor to investment returns for long-term holders, their sustainability is crucial. Procter & Gamble Hygiene and Health Care paid out 87% of its earnings as dividends last year, which may limit its ability to reinvest in the business and make it vulnerable to a downturn.

Moreover, the company paid out 97% of its free cash flow over the last year, which is outside the ideal range for most businesses. This could become a concern if earnings started to decline.