This Procter & Gamble Trade Targets a Near-20% Annualized Yield

If you’re looking for a get-rich-quick trade, Procter & Gamble (PG) probably isn’t your stock.

And honestly, that’s a big part of the appeal.

PG is slow, steady, boring — and for an income-oriented trade, boring can be beautiful.

PG closed yesterday at $143.92, and the May 15, 2026 $140 put was selling for around $3.70. By selling that cash-secured put, we can target a 19.3% annualized yield over the next 50 days while giving ourselves a chance to potentially own PG at an effective cost basis of $136.30 (vs the current price of $143.92).

Ideal outcome? PG stays above $140, the put expires worthless, and we pocket the premium.

But if the stock drifts lower and we get assigned, we should be perfectly comfortable owning PG there — especially since Mike Nadel just bought it for our Income Builder Portfolio (accessible to Dividends & Income Select subscribers).

The Trade Setup

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The Numbers

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By selling this put, we collect $370 immediately.

If PG stays above $140 through expiration, we keep the full premium. If the stock closes below $140, we could be assigned 100 shares at an effective cost basis of roughly $136.30 per share.

That gives this setup a nice mix of immediate income, a modest cushion to the strike, and a potential entry into one of the highest-quality consumer staples businesses in the market.

Why This Strike Makes Sense

The May 15 $140 put stands out because it offers a near-20% annualized yield on a stock that is usually more about reliability than excitement.

At a $3.70 premium, this trade generates a 2.6% return over 50 days. Annualized, that works out to about 19.3%. That’s a strong number for a company like Procter & Gamble.

It also helps to think about the trade in two layers of protection.

First, the stock can fall from $143.92 to $140 before it even reaches our strike price. That gives us about 2.7% downside to strike.

Second, because we’re collecting $3.70 per share up front, our effective cost basis would be about $136.30. That means PG could fall about 5.3% from the current price before we’d actually be underwater on the trade.

So no, this isn’t some deep-out-of-the-money bargain entry.

But for a slow-moving, defensive, dividend-growth stock like PG, getting paid this well for a 50-day commitment is attractive — especially if we’d be comfortable owning the shares anyway.

Why I’d Be Happy to Own PG at $136.30

This isn’t some random put-selling candidate.

Mike Nadel just bought PG for our Income Builder Portfolio.

He didn’t buy it because he expects Procter & Gamble to suddenly become a rocket ship. He bought it because PG is the kind of company income investors can own for years and sleep well at night.

This is a business that has been around for nearly 200 years. It owns a long list of iconic brands — including Tide, Pampers, Charmin, Crest, Old Spice, Bounty, Pantene, and Vicks — and it has more than 20 brands that each generate more than $1 billion in annual global sales.

That kind of brand power matters.

So does the dividend track record.

PG has paid a dividend without interruption or reduction since the late 1800s, and Mike noted that the company is on track to announce its 70th consecutive annual dividend increase next month. Very few companies can match that kind of consistency.

He also highlighted the traits dividend-growth investors care about most: a fortress balance sheet, low debt, a high credit rating, steady earnings power over time, and a reliable rising dividend.

That’s the kind of stock I don’t mind owning if a put gets assigned.

This Is a Quality Name, Not a Perfect One

Of course, PG is not flawless.

Mike pointed out that inflation, tariffs, and other macro pressures have weighed on the company, and recent earnings showed that organic sales and earnings growth were flat year over year.

That’s important.

It’s one reason I’m not especially interested in chasing the stock higher just because it feels “safe.”

But selling a put is different.

Instead of buying PG outright at $143.92, we can get paid now and potentially buy it later at an effective cost basis of $136.30.

That lower basis makes the trade more attractive.

The Long-Term Case Still Holds Up

Another reason I’m comfortable with the assignment scenario is that Mike made a pretty strong long-term case for the stock.

He pointed out that Morningstar still considers PG a wide-moat company. He also noted that Dave Van Knapp’s Big Board gives Procter & Gamble a perfect quality score, putting it in very rare company among dividend-growth stocks.

On valuation, Mike cited a mix of views, but the overall takeaway was constructive.

Morningstar’s fair value estimate was around $148. Simply Safe Dividends viewed the stock as undervalued. And the analysts tracked by LSEG had a mean price target of $168.

I’m never going to base a trade solely on analyst targets or fair value estimates.

But if I can potentially own PG at a net cost of $136.30, that looks reasonable to me in the context of those numbers.

The Two Scenarios

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That’s what makes this setup so appealing to me.

If PG holds above the strike, we capture a strong premium and move on.

If the stock dips and we get assigned, we’re potentially taking ownership of a slow-and-steady dividend grower that Mike just added to our Income Builder Portfolio for many of the same reasons long-term dividend investors have owned it for decades.

The Takeaway

My recommendation is simple: Sell 1 PG May 15, 2026 $140 PUT at $3.70 or better.

This trade checks a lot of boxes:

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This isn’t the flashiest trade in the market.

But that may be exactly why it works.

PG is a slow, durable, dividend-growing business. The premium is good enough to target a near-20% annualized yield. And if the stock does dip and we end up owning it at $136.30, that’s totally fine.

That’s my kind of income trade.

Good trading!
Greg Patrick

P.S. I’m seriously considering this PG trade in my own 401(k). If I pull the trigger, I’ll send the details to Dividends & Income Select subscribers, including the exact contract and premium collected.