Trade tensions are putting extra pressure on companies across the U.S., and the consumer goods industry is feeling the pinch in real time. Consumer spending, which makes up nearly two-thirds of all economic activity in the U.S., is growing by just 1.4%, its slowest pace since the pandemic.

For consumer staples giant Procter & Gamble (PG), the company’s recent fourth-quarter results made the impact clear: It is about to raise prices on a quarter of its U.S. lineup, mainly because of the latest round of tariffs. Management has already warned that these tariffs will push up costs by about $1 billion before tax in fiscal 2026. According to CFO Andre Schulten, even after P&G cuts costs internally, part of this extra burden will still show up on store shelves.

For investors, P&G has an impressive track record with 70 years of dividend increases, and a reputation as a Dividend King. But with nearly $1 billion in potential tariff costs ahead, will its steady income and strong business model be enough to protect investors from the fallout of these trade pressures? Let’s take a look.

P&G’s Financial Resilience

Procter & Gamble (PG) is a leader in the consumer products space, selling everyday names like Tide, Pampers, and Oral-B. Its business depends on delivering essentials at scale and staying up to date with what customers want. Still, the last year hasn’t been easy for the company. The stock has dropped 9% over the past 52 weeks and is down 10% since the start of 2025.

Even so, PG stock is still priced at a premium to many others in the sector. Its forward price-to-earnings ratio is 21.83, while the sector average sits at 16.32. This shows investors still see value in P&G’s brand strength and steady track record.

Looking at the latest numbers, P&G pulled in $84.3 billion in sales for fiscal 2025, with earnings per share up 8% to $6.51. In the most recent quarter, sales reached $20.9 billion and earnings per share climbed 17% to $1.48 compared to last year, thanks to cost savings and better profit margins, even as the company worked through restructuring and global challenges. Operating cash flow came in strong at $5 billion, and free cash flow productivity hit 110%.

The Growth Pillars Keeping P&G Afloat

Procter & Gamble is making big changes behind the scenes this year, cutting up to 7,000 non-manufacturing jobs and aiming for more than $1.5 billion in annual cost savings by 2026. The goal is to make the company quicker on its feet so it can keep up with what shoppers want and adjust rapidly to new trends. 

On the product side, there’s still a steady flow of new ideas, like the eco-friendly Tide EVO, and P&G is also moving into new areas with Zevo pest control and Spruce for lawn and garden care, looking for fresh ways to grow outside its usual business lines. However, in this market, PG's reputation for reliable grocery brands is probably more compelling for investors.

All of these efforts are closely tied to P&G’s strong record of paying dividends. Steady cash flows and careful cost control help support a dividend yield of 2.81%, more generous than the sector average of 1.89%. The payout ratio is healthy at 60.44%, and P&G has raised its dividend every year for the past 70 years. 

Analyst Sentiment and the Road Ahead

Heading into fiscal 2026, P&G is calling for diluted earnings per share to rise between 3% and 9%, which is slower than what it has posted in previous years. This forecast factors in about $800 million in after-tax costs from the new tariffs, plus another $200 million from higher raw material prices and $250 million because of rising interest and tax expenses.

Analysts have reacted quickly to this shift in outlook. JPMorgan just moved its rating on P&G from “Overweight” to “Neutral” and cut its price target from $178 to $170, citing worries over slower sales growth. Evercore ISI also trimmed its view, dropping the stock's rating to “In-Line” and lowering the price target from $190 to $170. Analyst Robert Ottenstein pointed to more competition and doubts about how well P&G can keep its market share and pricing power.

Even so, most analysts are still positive on the stock. Out of 24 analysts, the consensus is a “Moderate Buy,” with an average price target of $173.32. With shares currently at $152.88, that adds up to around 15% expected upside.

Conclusion 

Even with tariffs set to make a dent in future profits, Procter & Gamble’s long history of steady dividends and adaptive strategy give income seekers plenty of moat to cling to. While the near-term may feel uncertain, this dividend titan’s strong cash flows, trusted brands, and resilience in the face of headwinds suggest that its income stream is sturdy enough to cushion most of the blow. For investors willing to weather some volatility, P&G still offers what few can: blue-chip dependability paired with a dividend that continues to do more than just sweeten the pot.