company background image
PG

Procter & Gamble NYSE:PG Stock Report

Last Price

US$145.27

Market Cap

US$347.1b

7D

1.7%

1Y

2.2%

Updated

08 Aug, 2022

Data

Company Financials +
PG fundamental analysis
Snowflake Score
Valuation5/6
Future Growth2/6
Past Performance4/6
Financial Health2/6
Dividends5/6

PG Stock Overview

The Procter & Gamble Company provides branded consumer packaged goods worldwide.

The Procter & Gamble Company Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Procter & Gamble
Historical stock prices
Current Share PriceUS$145.27
52 Week HighUS$165.35
52 Week LowUS$129.50
Beta0.34
1 Month Change0.17%
3 Month Change-6.15%
1 Year Change2.17%
3 Year Change25.20%
5 Year Change58.50%
Change since IPO1,548.45%

Recent News & Updates

Aug 05

Procter & Gamble: Stability In An Uncertain Economic Environment

Guidance for FY2023 looks positive. In FY2022, there is not only growth, however, but good shareholder returns through buybacks ($10 billion) and dividends ($8.8 billion) totaling $18.8 billion. Procter & Gamble's fair value is $154 per share, and since it is currently trading at $145, it is slightly undervalued. With a beta of 0.39, this company has very low volatility, which is good in the current period of uncertainty. At P&G, the CEO is not the boss - the consumer is. Investment thesis Procter & Gamble (PG) is one of the most respected and solid companies in the world and has been in its industry for almost 200 years. In this economic scenario where uncertainty reigns, I consider it a wise choice to invest in companies with safe and predictable cash flows such as Procter & Gamble. In FY2022, this company proved its soundness for the umpteenth time and also presented rather positive guidance for FY2023. With growing dividends for 66 years and buybacks since 2012, shareholders are rewarded even in today's challenging economic environment. Procter & Gamble's fair value is around $163 per share, which is 6.38% higher than the current price, so a slight undervaluation is present. Since I strongly believe in the very long-term future of this company, I consider an initial buy at this price is justified and possibly averaging down if the price should fall far below. FY2022 was positive A few days ago, the company released its results for FY2022 and the outcome was quite positive considering the difficulties of the current macroeconomic scenario. Regarding this report, here are the words of the CEO, Jon R. Moeller: The P&G team’s execution of our integrated strategies delivered strong top-line growth, earnings growth, and significant cash return to shareowners in the face of severe cost and operational headwinds. As we look forward to fiscal 2023, we expect another year of significant headwinds. We remain committed to our integrated strategies of superiority, productivity, constructive disruption and an agile and accountable organization structure. They remain the right strategies to step forward into the near-term challenges we are facing and continue to deliver balanced growth and value creation. From these statements, then, what is apparent is that Procter & Gamble has once again proved resilient even in the face of the countless difficulties that almost all U.S. companies are currently experiencing. In particular, Jon R. Moeller for "headwinds" was referring mainly to the strong dollar negatively affecting exports, the continuing problems regarding the supply chain, and the cost of raw materials that remains high although there has been an improvement. The problems are many, but Procter & Gamble's income statement does not seem to be affected that much, on the contrary. P&G FY2022 Net sales increased by 5% over 2021 to $80.2 billion. If we did not consider the negative effects from foreign exchange, the growth would have been 7%. Of this 7%, 2% came from organic growth, 4% from price increases, and 1% from a positive mix. This means that even though from a technical point of view the U.S. is in recession, Procter & Gamble continues to maintain high earnings strength, while also manifesting organic growth in products sold. For EPS, the feedback is similar, and here, too, there has been a 7% growth over 2021 values. In FY2022 there is not only growth, however, but good shareholder returns through buybacks ($10 billion) and dividends ($8.8 billion) totaling $18.8 billion. Overall, it was a good year in spite of everything, but what is more important is that the guidance for FY2023 looks equally promising: Organic sales growth +3% to +5%. All-in sales growth 0% to +2% but discounting a negative exchange rate impact of 3%. Core and all-in EPS growth in-line to +4% versus year ago. Total dividends greater than $9 billion. Further purchase of treasury stock between $6 billion and $8 billion. However, the company is keen to point out that these estimates do not take into account a possible new strong appreciation of the dollar as well as further deterioration regarding supply chain and raw material costs. This is not to say that the estimates are not reliable, but that there are chances that the estimates will be revised downward. In any case, even if the macroeconomic scenario deteriorates further, I have no doubt that Procter & Gamble can perform better than most U.S. companies. This company's revenues come from the sale of indispensable products used every day by millions of consumers, and it is unreasonable to expect a sharp slump even in a worst-case scenario. To give us an idea of the strength of this company, the subprime mortgage crisis was one of the worst since '29, but even in those years Procter & Gamble managed to generate profits without many problems. TIKR Terminal From the pre-crisis period (2007) to the post-crisis period (2011), both revenues and profits remained stable and did not fall sharply. During those years, the company continued to do its job, which is to make steady and slightly increasing profits. Certainly the reduction in net income from 2009 onward was not positive, but overall I think the results achieved in those years were good considering the context in which the company was operating. What makes Procter & Gamble so solid As anticipated earlier, the main reason Procter & Gamble is so resilient to almost any economic scenario is due to the sale of products that people buy every day. This company specializes in selling about 65 brands related to personal care, home care, and hygiene, whose products have made it one of the most robust consumer staples in the world. Revenues come from all over the world (more than 50% do not come from the U.S.) and the company has been operating for nearly 200 years. The strength of its balance sheets has been a constant for its shareholders for decades, who can sleep soundly even during the worst possible scenario. Here are the main achievements over the past 10 years. Growing revenues and return on capital What makes a company stable and not very volatile is the consistency and predictability of its revenues. Whatever the economic scenario, we can expect Procter & Gamble to achieve revenues in a range that is not particularly wide, so it is rare to get particularly negative or positive surprises. TIKR Terminal Within this graph we can see the main data regarding the profitability of this company. The first thing that stands out is that since 2012 the company saw its revenues decline. But how was this possible? The reason for this decline is purely technical since if you look at net income and return on capital both have steadily increased considering a long-term horizon. It should be specified, however, that regarding net income, the growth although present has been subject to high volatility. Specifically in 2019, the company booked asset write-down of $1.54 billion and impairment of goodwill of $6.80 billion. These are non-monetary costs that negatively affect net income while not manifesting a cash outflow (in fact, free cash flow for that year was $11.89 billion). If revenues fell, it is because in 2014 Procter & Gamble sold about 100 brands while focusing on the remaining 65 that alone produced the vast majority of revenues. This led to a reduction in revenues, but at the same time also to a reduction in operating costs and cost of goods sold. TIKR Terminal Revenues in 2013 and 2022 were basically the same, but the composition of costs is very different. Operating costs have decreased by nearly $6 billion since then while the cost of goods sold has increased by about $2.2 billion. However, the latter increase can be attributed to the high cost of raw materials in 2021 and mid-2022. I expect that with a decline in raw materials (some of which is already happening) the cost of goods sold will drop significantly in the future. In hindsight, we can say that former CEO Alan George Lafley's choice to streamline operations was a success. His goal was to make the future of this company less complex and more profitable, and he succeeded. Although Lafley is no longer part of the company, his philosophy is still settled within the operational management. Here is what he said about this strategy: Three billion times a day P&G brands touch the lives of people around the world. Our goal is to delight consumers at two moments of truth: first, when they buy a product, and second, when they use it. To achieve that, we live with our consumers and try to see the world and opportunities for new products through their eyes. At P&G the CEO is not the boss - the consumer is. These statements are 14 years old but more current than ever. Financial situation always sound The financial situation of this company has never been in question since profits have never been lacking.

Jul 30
The Procter & Gamble Company (NYSE:PG) is Attractive to Institutions in the Inflationary Market

The Procter & Gamble Company (NYSE:PG) is Attractive to Institutions in the Inflationary Market

It is not a secret that Consumer Staples do better than average in market downturns, especially when inflation is added to the mix. At the moment this sector is still down for the year (-5.2%) but doing much better than the broad market. As the earnings season reaches its peak, we’ll look into the latest results from The Procter & Gamble Company (NYSE: PG), a company that trades at a cheaper valuation than the sector’s average.

Jul 29

Procter & Gamble Non-GAAP EPS of $1.21 misses by $0.02, revenue of $19.52B beats by $110M

Procter & Gamble press release (NYSE:PG): FQ4 Non-GAAP EPS of $1.21 misses by $0.02. Revenue of $19.52B (+3.0% Y/Y) beats by $110M. Shares +0.5% PM. The company expects fiscal year 2023 all-in sales growth in the range of in-line to up two percent versus the prior fiscal year. Organic sales growth in the range of three to five percent. Diluted net earnings per share growth in the range of in-line to up four percent versus fiscal 2022 EPS of $5.81. At the mid-point of the range, this outlook equates to $5.93 per share, or an increase of two percent.

Shareholder Returns

PGUS Household ProductsUS Market
7D1.7%1.4%1.1%
1Y2.2%0.9%-13.0%

Return vs Industry: PG exceeded the US Household Products industry which returned 0.9% over the past year.

Return vs Market: PG exceeded the US Market which returned -12.9% over the past year.

Price Volatility

Is PG's price volatile compared to industry and market?
PG volatility
PG Average Weekly Movement4.0%
Household Products Industry Average Movement5.1%
Market Average Movement7.9%
10% most volatile stocks in US Market17.1%
10% least volatile stocks in US Market3.2%

Stable Share Price: PG is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: PG's weekly volatility (4%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
1837106,000Jon Moellerhttps://www.pginvestor.com

The Procter & Gamble Company provides branded consumer packaged goods worldwide. It operates through five segments: Beauty; Grooming; Health Care; Fabric & Home Care; and Baby, Feminine & Family Care. The Beauty segment offers conditioners, shampoos, styling aids, and treatments under the Head & Shoulders, Herbal Essences, Pantene, and Rejoice brands; and antiperspirants and deodorants, personal cleansing, and skin care products under the Olay, Old Spice, Safeguard, Secret, and SK-II brands.

The Procter & Gamble Company Fundamentals Summary

How do Procter & Gamble's earnings and revenue compare to its market cap?
PG fundamental statistics
Market CapUS$347.13b
Earnings (TTM)US$14.46b
Revenue (TTM)US$80.19b

24.0x

P/E Ratio

4.3x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
PG income statement (TTM)
RevenueUS$80.19b
Cost of RevenueUS$41.98b
Gross ProfitUS$38.21b
Other ExpensesUS$23.75b
EarningsUS$14.46b

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)6.05
Gross Margin47.65%
Net Profit Margin18.03%
Debt/Equity Ratio67.2%

How did PG perform over the long term?

See historical performance and comparison

Dividends

2.5%

Current Dividend Yield

59%

Payout Ratio