Slimmed-Down P&G Worth a Closer Look
Despite shutting down half of its brand portfolio, wide-moat Procter & Gamble should maintain its scale advantages and increase shareholders' total return through dividend payments.
Despite shutting down half of its brand portfolio, wide-moat Procter & Gamble should maintain its scale advantages and increase shareholders' total return through dividend payments.
Erin Lash: Within the consumer products landscape, we think investors should consider initiating a position in Procter & Gamble (PG). It's a wide-moat name with an attractive valuation. Last quarter, P&G announced that it would be shutting more than half of its brand portfolio. And while this might sound significant, these brands have been underperforming from both a top-line as well as a profitability perspective over the last several years.
We think that focusing their resources on the highest return opportunities will ultimately enable them to be more responsive to consumer trends in this highly competitive environment. Further, we don't think that this inhibits the firm's scale advantages to any regard, given that the brands that they are continuing to operate make up the bulk of their sales and profitability.
In addition, P&G is committed to returning excess cash to shareholders through its dividend payments, increasing the total return that shareholders are poised to receive. Given the attractive valuation, we think investors should take a closer look at this wide-moat name.
Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.
We’d like to share more about how we work and what drives our day-to-day business.
We sell different types of products and services to both investment professionals
and individual investors. These products and services are usually sold through
license agreements or subscriptions. Our investment management business generates
asset-based fees, which are calculated as a percentage of assets under management.
We also sell both admissions and sponsorship packages for our investment conferences
and advertising on our websites and newsletters.
How we use your information depends on the product and service that you use and your relationship with us. We may use it to:
To learn more about how we handle and protect your data, visit our privacy center.
Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.
To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.
Read our editorial policy to learn more about our process.