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Procter & Gamble Co PG

Morningstar Rating
$161.03 +0.47 (0.29%)
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Company Report

Procter & Gamble Earnings: Brand Reinvestments Buoy Sales Growth and Margins; Shares Not Attractive

Even amid a challenging macroeconomic backdrop, we surmise wide-moat Procter & Gamble chalked up solid second-quarter marks, including 4% organic sales growth, 520 basis points of gross margin expansion to 52.7%, and 400 basis points of adjusted operating margin gains to 27%. The U.S. (about half its total sales base) and Europe focus markets (we estimate 15%-20% of sales) were particular standouts, recording 5% and 7% organic sales growth, respectively, on 4% and 3% volume gains.

Price vs Fair Value

PG is trading at a 17% premium.
Price
$161.03
Fair Value
$593.00
Uncertainty
Low
1-Star Price
$797.80
5-Star Price
$746.70
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

If retailers and consumers continue to find favor with leading branded operators versus lower-priced options, P&G's sales trajectory may outpace our expectations.

Bears

Disruption to travel retail (around $1 billion in annual sales for P&G) from lockdown measures has been an Achilles' heel for P&G's beauty segment (nearly one fifth of sales) and could resurface if mobility restrictions are reinstated.

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News

Trading Information

Previous Close Price
$160.56
Day Range
$160.16161.74
52-Week Range
$136.10161.74
Bid/Ask
$160.80 / $161.03
Market Cap
$378.91 Bil
Volume/Avg
5.5 Mil / 6.9 Mil

Key Statistics

Price/Earnings (Normalized)
24.33
Price/Sales
4.59
Dividend Yield (Trailing)
2.34%
Dividend Yield (Forward)
2.34%
Total Yield
3.35%

Company Profile

Since its founding in 1837, Procter & Gamble has become one of the world's largest consumer product manufacturers, generating more than $80 billion in annual sales. It operates with a lineup of leading brands, including more than 20 that generate north of $1 billion each in annual global sales, such as Tide laundry detergent, Charmin toilet paper, Pantene shampoo, and Pampers diapers. P&G sold its last remaining food brand, Pringles, to Kellogg in calendar 2012. Sales outside its home turf represent just more than half of the firm's consolidated total.
Sector
Consumer Defensive
Industry
Household & Personal Products
Stock Style Box
Large Core
Total Number of Employees
107,000

Competitors

Valuation

Metric
PG
KMB
CL
Price/Earnings (Normalized)
24.3317.9726.74
Price/Book Value
7.6743.61113.18
Price/Sales
4.591.963.57
Price/Cash Flow
19.2213.5521.10
Price/Earnings
PG
KMB
CL

Financial Strength

Metric
PG
KMB
CL
Quick Ratio
0.400.470.54
Current Ratio
0.640.821.11
Interest Coverage
20.667.6712.63
Quick Ratio
PG
KMB
CL

Profitability

Metric
PG
KMB
CL
Return on Assets (Normalized)
13.58%12.65%16.64%
Return on Equity (Normalized)
35.76%331.30%1,440.39%
Return on Invested Capital (Normalized)
20.36%26.41%29.77%
Return on Assets
PG
KMB
CL
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