PG  Procter & Gamble Company (The)

Exchange

NYSE

Sector

Basic Industries

Industry

Package Goods/Cosmetics

Market Cap.

234.51B

Vuru Grade

67.09/100

Current Price

$91.73
+0.06 (+0.07%)

Growth Price

$45.24
Overvalued by 50.68%

Stability Price

$27.45
Overvalued by 70.08%

Company Metrics

  • P/E 16.81
  • P/S 3.59
  • P/B 4.5
  • EPS 5.46
  • Cash ROIC 11.33%
  • Cash Ratio 0.43
  • Dividend 2.68 / 2.94%
  • Avg. Vol. 9.24M
  • Shares 2.84B
  • Market Cap. 234.51B

Company Description

The Procter & Gamble Company provides consumer packaged goods in the United States and internationally. The company operates in three global business units (GBUs): Beauty and Grooming, Health and Well-Being, and Household Care. The Beauty and Grooming GBU offers female beauty products, including cosmetics, deodorants, female blades and razors, personal cleansing and skin care products, hair care p... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

Procter & Gamble: Long-Term Expectations
Seeking Alpha - 10 hours ago
Procter & Gamble's brand portfolio is second to none among consumer staples, and has a record of growth that spans back decades.
When will P&G reveal its next move? - Cincinnati.com
Procter & Gamble and Hindustan Unilever: Shampoo ad lawsuits dismissed - CosmeticsDesign-Asia.com
Better Buy: PepsiCo, Inc. vs. Procter & Gamble Co.
Motley Fool - Feb 21, 2017
Retirees love dividend stocks, and for good reason. Well-established companies with wide moats and prodigious free cash flow are the backbone to any nest egg.
Procter & Gamble Company (The) (PG) Closes 0.64% Up on the Day for February 21 - Equities.com
Procter & Gamble Co (PG) Insider Charles E. Pierce Sells 55909 Shares - The Cerbat Gem
Procter & Gamble Co.'s New Billionaire Investor
Motley Fool - Feb 18, 2017
Procter & Gamble (NYSE:PG) shares this week crossed $90 for the first time since 2014 following reports that a new, well-funded investor has built up a huge stake in the consumer products giant.
Will Procter & Gamble (PG) Stock Stay Recession-Proof? - Investorplace.com
Nelson Peltz's Trian 13F Filing Shows Big Bet on Procter & Gamble (PG) - Investopedia
3 Ways Procter & Gamble Co. Is Beating the Competition
Motley Fool - Feb 13, 2017
Procter & Gamble (NYSE:PG) is on stronger footing these days. Its fourth-quarter expansion pace recently edged past Kimberly-Clark's (NYSE:KMB) for the first time in over two years.
'Shakeup Event' Could Send P&G Soaring
Seeking Alpha - Feb 21, 2017
Procter & Gamble Co (NYSE:PG) is one of my favorite dividend stocks for 2017. Some of the smartest investors in the world are buying up shares.
Unilever's off the hook – for now – but new threat to P&G may also impact the ... - More About Advertising | Insights into Advertising
Procter & Gamble Co Is on Track to Give Shareholders $22 Billion in 2017
Motley Fool - Feb 9, 2017
The lower overall payout is just a quirk caused by the combination of a falling share count and the company's tiny dividend boost for 2017.
Taking a Fresh Look at The Procter & Gamble Company (PG) - StockNewsJournal
The Jag Capital Management LLC Sells 305 Shares of Procter & Gamble Company ... - DailyQuint
What's Behind Procter & Gamble Co.'s Sales Growth Upgrade?
Motley Fool - Feb 4, 2017
Procter & Gamble (NYSE:PG) shareholders received good news on the sales front recently as the company hiked its full-year outlook following two consecutive quarters of surprising gains.
Is it Time to Buy Procter & Gamble Co. Stock? - Fox Business
Procter & Gamble Company (The) (PG) Closes 0.4% Down on the Day for February 03 - Equities.com
Analyst: New activist investor increases chance of a Procter & Gamble breakup
WCPO - Feb 15, 2017
CINCINNATI - Procter & Gamble Co. shares are rising on reports that Trian Fund Management, an activist hedge fund, has acquired a more than $3 billion stake in the consumer-products giant that has struggled in recent years to grow revenue and profits.
Procter & Gamble: Another Activist - Seeking Alpha
Procter & Gamble Co (PG) Stock Jumps on $3.5B Trian Stake - Investorplace.com
How Risky Is The Procter & Gamble Company?
Motley Fool - Jan 27, 2017
Procter & Gamble was once a hallmark of American innovation, as it was a pioneer of products like laundry detergent, fluoride-based toothpaste, and disposable diapers, but its innovation pipeline has dried out in recent years as the company has spent a ...
Trian takes $3.5 billion stake in Procter & Gamble
Reuters - Feb 14, 2017
Trian Fund Management LP disclosed a $3.5 billion stake in Procter & Gamble Co (PG.N) on Tuesday, taking aim at the maker of Pampers diapers as it moves to boost sales and shed unprofitable brands.
3 Reasons Procter & Gamble Co (PG) Stock Is a Great Long-Term Bet - Investorplace.com
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for PG to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate PG's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$91.73 Current Price

$45.24 Growth Price (DCF)

Overvalued by 50.68%


Growth Rate Assumed by Market: 23.46%


Future Free Cash Flow Growth Rate: -2.3%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$27.45 Stability Price (EPV)

Overvalued by 70.08%


Discount Rate: 15.0%

$64.60 Book Price

Overvalued by 29.57%


Growing Cash Return on Invested Capital over the past 5 years

PG has continued to efficiently invest its financial resources in buildings, projects, and equipment, resulting in increasingly stronger returns. Look at its Annual Reports to determine future sustainability.

PG has created $11.33 of cash for every $100 invested.
Figures in USD. Fiscal year ends in June
20122013201420152016
Free Cash Flow 9.32B 10.87B 10.11B 10.87B 12.12B
divided by
Invested Capital 102.90B 103.28B 99.85B 88.09B 83.02B
Cash ROIC 9.06% 10.52% 10.12% 12.34% 14.60%

Excellent Return on Equity over the past 5 years

Over the past 5 years, PG has generated strong profits with money shareholders have invested. This is considered one of the best indicators of quality management. Beware of extremely high Return on Equity (> 50%) as this is often unsustainable.

PG has generated $16.18 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in June
20122013201420152016
Net Income 10.90B 11.40B 11.79B 7.14B 10.60B
divided by
Stockholders' Equity 63.44B 68.06B 69.21B 62.42B 57.34B
Return on Equity 17.19% 16.75% 17.03% 11.45% 18.49%

Excellent Business Performance over the past 10 years

PG has been able to maintain profitability in good times and bad. This could mean PG has an extremely strong business or has the ability to scale down costs when needed. This should be a fairly resilient business, but double check for future sustainability by looking at its Risk Factors in the Annual Report.

PG has created positive free cash flow for 9 or more of the past 10 years.
Figures in USD. Fiscal year ends in June
2007200820092010201120122013201420152016
Free Cash Flow 10.49B 12.77B 11.68B 13.01B 9.93B 9.32B 10.87B 10.11B 10.87B 12.12B

Weak Balance Sheet

PG's financial position is not ideal. The key is to check whether PG is using debt to fuel its growth and the sustainability of that tendency. Highly capital intensive businesses (see Economic Moat) follow this route, which can deeply impact the future prospects of the business.
Figures in USD. Fiscal year ends in June
2007200820092010201120122013201420152016
Cash 5.56B 3.54B 4.78B 2.88B 2.77B 4.44B 5.95B 10.69B 11.61B 13.35B
Current Assets 24.03B 24.52B 21.91B 18.78B 21.97B 21.91B 23.99B 31.62B 29.65B 33.78B
Total Assets 138.01B 143.99B 134.83B 128.17B 138.35B 132.24B 139.26B 144.27B 129.50B 127.14B
Current Liabilities 30.72B 30.96B 30.90B 24.28B 27.29B 24.91B 30.04B 33.73B 29.79B 30.77B
Total Liabilities 71.25B 74.50B 71.73B 67.06B 70.71B 68.81B 71.20B 75.05B 67.08B 69.80B
Stockholder' Equity 66.76B 69.49B 63.10B 61.12B 67.64B 63.44B 68.06B 69.21B 62.42B 57.34B
Current Ratio 0.78 0.79 0.71 0.77 0.80 0.88 0.80 0.94 1.00 1.10
TL-to-TA 0.52 0.52 0.53 0.52 0.51 0.52 0.51 0.52 0.52 0.55

Consistent Reinvestment of Profits over the past 10 years

PG has consistently retained profits. This may put PG in a strong position to invest for the future, by buying new machinery, investing in R&D or a number of other options. By effectively using these earnings, PG can greatly improve their long-term economic picture.
Figures in USD. Fiscal year ends in June
2007200820092010201120122013201420152016
Retained Earnings 41.80B 48.99B 57.31B 64.61B 70.68B 75.35B 80.20B 84.99B 84.81B 87.95B
Retained Earnings Growth - 17.20% 16.99% 12.75% 9.39% 6.60% 6.43% 5.98% -0.22% 3.71%

Potential Competitive Advantage over the past 10 years

PG potentially has a competitive advantage. This could be strong branding, the ability to keep costs low, or some other characteristic that is hard to replicate. Look at its future prospects to determine sustainability and whether the economic moat will strengthen.

$14.18 of every $100 of Revenue have been pure profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in June
2007200820092010201120122013201420152016
Net Income 10.34B 12.08B 13.44B 12.74B 11.80B 10.90B 11.40B 11.79B 7.14B 10.60B
divided by
Revenue 76.48B 83.50B 79.03B 78.94B 82.56B 83.68B 84.17B 83.06B 76.28B 65.30B
Net Profit Margin 13.52% 14.46% 17.00% 16.13% 14.29% 13.03% 13.55% 14.19% 9.37% 16.24%

Strong Pricing Power over the past 10 years

PG has maintained substantial gross margins, suggesting that they have been able to set prices without consideration of the cost of goods sold. This potentially leaves flexibility in inflationary environments to raise prices on consumers and maintain profitability.

$55.38 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in June
2007200820092010201120122013201420152016
Gross Profit 39.79B 42.81B 40.13B 41.02B 41.79B 83.68B 41.74B 40.60B 37.40B 32.39B
divided by
Revenue 76.48B 83.50B 79.03B 78.94B 82.56B 83.68B 84.17B 83.06B 76.28B 65.30B
Gross Margin 52.03% 51.27% 50.78% 51.96% 50.62% 100.00% 49.59% 48.88% 49.03% 49.60%

Medium Capital Intensity over the past 10 years

PG has used a reasonable amount of their financial resources to invest in facilities and equipment required to produce its goods and services. This isn't perfect, but it shouldn't be an area of concern unless this number is strongly trending upwards.

31.76% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in June
2007200820092010201120122013201420152016
Capital Expenditure 2.95B 3.05B 3.24B 3.07B 3.31B 3.96B 4.01B 3.85B 3.74B 3.31B
divided by
Net Income 10.34B 12.08B 13.44B 12.74B 11.80B 10.90B 11.40B 11.79B 7.14B 10.60B
Capital Expenditure Ratio 28.48% 25.23% 24.10% 24.08% 28.02% 36.35% 35.15% 32.65% 52.30% 31.25%

Very Strong Dividend History over the past 10 years

PG has consistently distributed a dividend for at least the past 10 years. Such a long dividend history suggests PG is very established in its market and that its dividend distribution is likely to continue for a significant period of time.
Figures in USD. Fiscal year ends in June
2007200820092010201120122013201420152016
Dividend Paid 4.21B 4.66B 5.04B 5.46B 5.77B 6.14B 6.52B 6.91B 7.29B 7.44B
divided by
Shares Outstanding 3.40B 3.32B 3.15B 3.10B 3.00B 2.94B 2.93B 2.90B 2.88B 2.84B
Dividend Paid Per Share 1.24 1.40 1.60 1.76 1.92 2.09 2.22 2.38 2.53 2.61
Price at Year End 65.55 55.23 57.21 61.77 66.18 67.15 82.00 92.40 80.07 84.08
Dividend Yield 1.89% 2.54% 2.80% 2.85% 2.90% 3.11% 2.71% 2.57% 3.16% 3.11%

Strong History of Stock Buybacks over the past 10 years

PG has a strong history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in June
2007200820092010201120122013201420152016
Shares Outstanding 3.40B 3.32B 3.15B 3.10B 3.00B 2.94B 2.93B 2.90B 2.88B 2.84B
Stock Bought Back - 2.47% 5.16% 1.77% 3.24% 2.06% 0.36% 0.89% 0.73% 1.38%
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