PG  Procter & Gamble Company (The)

Exchange

NYSE

Sector

Basic Industries

Industry

Package Goods/Cosmetics

Market Cap.

225.04B

Vuru Grade

68.75/100

Current Price

$88.25
-3.34 (-3.65%)

Growth Price

$43.06
Overvalued by 51.21%

Stability Price

$13.91
Overvalued by 84.24%

Company Metrics

  • P/E 15.78
  • P/S 3.59
  • P/B 4.32
  • EPS 5.59
  • Cash ROIC 12.01%
  • Cash Ratio 0.50
  • Dividend 2.76 / 2.97%
  • Avg. Vol. 6.77M
  • Shares 2.55B
  • Market Cap. 225.04B

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 Co (PG) Stock Slides on Disappointing Sales
Investorplace.com - 20 hours ago
During its fiscal first quarter of 2017, Procter & Gamble Co reported net sales of $16.65 billion. This is an increase over its net sales of $16.52 billion from its fiscal third quarter of 2017.
P&G stock dips after 1Q earnings report - Cincinnati Business Courier
P&G, After Slight Sales Gain, Puzzled by Weak US Consumer Spending - Wall Street Journal
Procter & Gamble Co. Q1 Profit Advances 1%
Nasdaq - Oct 20, 2017
(RTTNews.com) - Procter & Gamble Co. ( PG ) released earnings for its first quarter that gained ground compared to the same period last year.
3 Big Stock Charts for Friday: Verizon Communications Inc., General Electric ...
Yahoo Finance - 19 hours ago
Today's three big stock charts will take a look at the technicals for Verizon Communications Inc. (NYSE:VZ), General Electric Company (NYSE:GE) and Procter & Gamble Co (NYSE:PG). These three companies have just released their earnings on the market ...
Procter & Gamble Co. Earnings: What to Watch on Friday
Motley Fool - Oct 16, 2017
As usual, all eyes will be on P&G's organic sales growth rate as Wall Street hunts for evidence that market trends are improving at the pace management has projected.
Ex-Dividend Reminder: WD-40, Procter & Gamble and PerkinElmer - Forbes
Taking a Look at the Data Behind The Procter & Gamble Company (PG) - StockNewsJournal
Gillette weakens P&G report after Peltz row
Reuters - Oct 20, 2017
(Reuters) - Procter & Gamble Co (PG.N) disappointed Wall Street with sales on Friday, hurt by continuing weakness in its Gillette business, a week after it claimed to have fought off hedge-fund manager Nelson Peltz's move to muscle onto the board.
P&G Exec Debunks Myths That Hispanic Withdrawal and Cell Phones Are Big Problems - TheStreet.com
P&G's big investors want company to speed turnaround, CFO says - Cincinnati Business Courier
Light profit guidance from Procter & Gamble
Seeking Alpha - Oct 20, 2017
Volume was up 1% during the quarter, led by a 2% gain in the fabric & home care segment. Pricing and mix were both flat across segments.
Procter & Gamble Co., activist investor Nelson Peltz expected to enter snake ...
WCPO - Oct 16, 2017
CINCINNATI -- After a costly, monthslong proxy fight, activist investor Nelson Peltz is expected to enter the "snake pit" with the Procter & Gamble Co., CNBC reports. That's the name for the nasty process of checking each contested vote. P&G announced ...
What Is A 'Snake Pit' And Why Should Procter & Gamble Shareholders Care? - Benzinga
Procter & Gamble co-founder's church celebrates 175 years
Cincinnati.com - Oct 13, 2017
One of the church's original members was James Gamble, a co-founder of Procter and Gamble. The church relocated to the current location at 3460 Epworth Avenue in 1896.
Consumer Staples Dividend Aristocrats For Your Retirement Portfolio - Part 2
Seeking Alpha - 12 minutes ago
Author's Note: This article on Procter & Gamble Co was written prior to the release of FY 2018 first-quarter results that were announced on Oct. 20th.
P&G falls as tepid sales gain disappoints - Financial Times
Procter & Gamble Co (PG) Stock Won't See a Dent From Internal Bloodbath
Investorplace.com (blog) - Oct 13, 2017
Peltz's criticism of the company has been that management is moving too slowly and it isn't taking the challenges of the modern market as seriously as it should.
P&G's Vow to Innovate Has It Testing Smart Makeup, Toothbrushes - Bloomberg
Procter & Gamble Isn't Going to Get Rid of Nelson Peltz So Easily - TheStreet.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.

$88.25 Current Price

$43.06 Growth Price (DCF)

Overvalued by 51.21%


Growth Rate Assumed by Market: 25.27%


Future Free Cash Flow Growth Rate: -2.6%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$13.91 Stability Price (EPV)

Overvalued by 84.24%


Discount Rate: 15.0%

$65.46 Book Price

Overvalued by 25.83%


Satisfactory Cash Return on Invested Capital over the past 5 years

PG has somewhat efficiently invested its financial resources in buildings, projects, and equipment. If CROIC is inconsistent, it's likely PG could be benefiting from a one-time event or has a mixed history of investing capital productively. Read the company's Annual Report to determine whether this can improve.

PG has created $12.01 of cash for every $100 invested.
Figures in USD. Fiscal year ends in June
20132014201520162017
Free Cash Flow 10.87B 10.11B 10.87B 12.12B 9.37B
divided by
Invested Capital 103.28B 99.85B 88.09B 83.02B 75.06B
Cash ROIC 10.52% 10.12% 12.34% 14.60% 12.48%

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 $18.33 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in June
20132014201520162017
Net Income 11.40B 11.79B 7.14B 10.60B 15.41B
divided by
Stockholders' Equity 68.06B 69.21B 62.42B 57.34B 55.18B
Return on Equity 16.75% 17.03% 11.45% 18.49% 27.93%

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
2008200920102011201220132014201520162017
Free Cash Flow 12.77B 11.68B 13.01B 9.93B 9.32B 10.87B 10.11B 10.87B 12.12B 9.37B

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
2008200920102011201220132014201520162017
Cash 3.54B 4.78B 2.88B 2.77B 4.44B 5.95B 10.69B 11.61B 13.35B 15.14B
Current Assets 24.52B 21.91B 18.78B 21.97B 21.91B 23.99B 31.62B 29.65B 33.78B 26.49B
Total Assets 143.99B 134.83B 128.17B 138.35B 132.24B 139.26B 144.27B 129.50B 127.14B 120.41B
Current Liabilities 30.96B 30.90B 24.28B 27.29B 24.91B 30.04B 33.73B 29.79B 30.77B 30.21B
Total Liabilities 74.50B 71.73B 67.06B 70.71B 68.81B 71.20B 75.05B 67.08B 69.80B 65.22B
Stockholder' Equity 69.49B 63.10B 61.12B 67.64B 63.44B 68.06B 69.21B 62.42B 57.34B 55.18B
Current Ratio 0.79 0.71 0.77 0.80 0.88 0.80 0.94 1.00 1.10 0.88
TL-to-TA 0.52 0.53 0.52 0.51 0.52 0.51 0.52 0.52 0.55 0.54

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
2008200920102011201220132014201520162017
Retained Earnings 48.99B 57.31B 64.61B 70.68B 75.35B 80.20B 84.99B 84.81B 87.95B 96.12B
Retained Earnings Growth - 16.99% 12.75% 9.39% 6.60% 6.43% 5.98% -0.22% 3.71% 9.29%

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.

$15.19 of every $100 of Revenue have been pure profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in June
2008200920102011201220132014201520162017
Net Income 12.08B 13.44B 12.74B 11.80B 10.90B 11.40B 11.79B 7.14B 10.60B 15.41B
divided by
Revenue 83.50B 79.03B 78.94B 82.56B 83.68B 84.17B 83.06B 76.28B 65.30B 65.06B
Net Profit Margin 14.46% 17.00% 16.13% 14.29% 13.03% 13.55% 14.19% 9.37% 16.24% 23.69%

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.

$55.17 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
2008200920102011201220132014201520162017
Gross Profit 42.81B 40.13B 41.02B 41.79B 83.68B 41.74B 40.60B 37.40B 32.39B 32.52B
divided by
Revenue 83.50B 79.03B 78.94B 82.56B 83.68B 84.17B 83.06B 76.28B 65.30B 65.06B
Gross Margin 51.27% 50.78% 51.96% 50.62% 100.00% 49.59% 48.88% 49.03% 49.60% 49.99%

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.

31.11% 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
2008200920102011201220132014201520162017
Capital Expenditure 3.05B 3.24B 3.07B 3.31B 3.96B 4.01B 3.85B 3.74B 3.31B 3.38B
divided by
Net Income 12.08B 13.44B 12.74B 11.80B 10.90B 11.40B 11.79B 7.14B 10.60B 15.41B
Capital Expenditure Ratio 25.23% 24.10% 24.08% 28.02% 36.35% 35.15% 32.65% 52.30% 31.25% 21.96%

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
2008200920102011201220132014201520162017
Dividend Paid 4.66B 5.04B 5.46B 5.77B 6.14B 6.52B 6.91B 7.29B 7.44B 7.24B
divided by
Shares Outstanding 3.32B 3.15B 3.10B 3.00B 2.94B 2.93B 2.90B 2.88B 2.84B 2.74B
Dividend Paid Per Share 1.40 1.60 1.76 1.92 2.09 2.22 2.38 2.53 2.61 2.64
Price at Year End 55.23 57.21 61.77 66.18 67.15 82.00 92.40 80.07 84.08 86.17
Dividend Yield 2.54% 2.80% 2.85% 2.90% 3.11% 2.71% 2.57% 3.16% 3.11% 3.06%

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
2008200920102011201220132014201520162017
Shares Outstanding 3.32B 3.15B 3.10B 3.00B 2.94B 2.93B 2.90B 2.88B 2.84B 2.74B
Stock Bought Back - 5.16% 1.77% 3.24% 2.06% 0.36% 0.89% 0.73% 1.38% 3.80%
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