PG  Procter & Gamble Company (The)

Exchange

NYSE

Sector

Basic Industries

Industry

Package Goods/Cosmetics

Market Cap.

223.15B

Vuru Grade

67.09/100

Current Price

$87.25
+0.39 (+0.45%)

Growth Price

$45.24
Overvalued by 48.15%

Stability Price

$27.45
Overvalued by 68.54%

Company Metrics

  • P/E 16.04
  • P/S 3.41
  • P/B 4.21
  • EPS 5.44
  • Cash ROIC 11.33%
  • Cash Ratio 0.43
  • Dividend 2.76 / 3.16%
  • Avg. Vol. 7.52M
  • Shares 2.84B
  • Market Cap. 223.15B

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

How Procter & Gamble Co. Makes Most of Its Money
Motley Fool - May 15, 2017
Thanks to the Tide, Ariel, and Downy brands, the company is the global market share leader in laundry, with 30% of the industry under its thumb.
Procter & Gamble Organic Sales Slacken, Cost Cut Bodes Well - Zacks.com
Lincluden Management Ltd. Raises Position in Procter & Gamble Co (PG) - The Cerbat Gem
Better Buy: Procter & Gamble Company vs. Coca-Cola
Motley Fool - May 18, 2017
Procter & Gamble's products may be in more homes than any other company in the world. The company has built a global empire by establishing leading positions across a wide range of household goods, including paper products, diapers, detergent, razors, ...
Procter & Gamble Co (PG) Position Boosted by Integrated Investment Consultants LLC - The Cerbat Gem
How Does The Procter & Gamble Company (PG) Stack Up Right Now? - StockNewsJournal
Procter & Gamble: Dividend Hits Keep Coming
Seeking Alpha - May 11, 2017
Procter & Gamble (NYSE:PG) is a stock that I'm not quite sure why people own it. The reasons are many but chief among them is the company's complete lack of ability to grow. This impacts not only EPS, which then impacts the valuation (which I find ...
What Analysts Have to Say About Procter & Gamble Co (NYSE:PG)? - ExpertGazette
The Procter & Gamble Company (PG) Delivers Consistent EPS Surprises
AppsforPCdaily - 7 hours ago
The price-to-book ratio of 4.2 for The Procter & Gamble Company (NYSE:PG) implies that investors are highly hopeful for the organization to create more value from the given set of assets.
Longer Investments Inc. Has $2.27 Million Position in Procter & Gamble Co (PG) - BNB Daily (blog)
Procter & Gamble Co (PG) Insider Sells $4256079.96 in Stock - The Cerbat Gem
Better Buy: Procter & Gamble Co. vs. Philip Morris International Inc.
Motley Fool - May 1, 2017
Procter & Gamble (NYSE:PG) and Philip Morris International (NYSE:PM) are both consumer staples heavyweights that usually hold up well during market downturns.
Procter & Gamble Downtrend Prompts Vetr Downgrade
Benzinga - May 23, 2017
The Vetr crowd downgraded its rating for Procter & Gamble Co (NYSE: PG) from 4 stars (Buy), issued four days ago, to 3 stars (Hold).
Procter & Gamble Whiffs Again
Seeking Alpha - May 1, 2017
I haven't exactly been a fan of consumer giant Procter & Gamble (NYSE:PG) in the past. I've thought the valuation to be exorbitant at a bunch of different times, and while the dividend is nice, its rubbish buyback sours the mood a bit as well.
Could Procter & Gamble be the next Kodak?
USA TODAY - May 19, 2017
More than five years into a turnaround, P&G executives have bet the company's future on a plan to sell off a bunch of small brands to refocus the business on its 65 top-selling labels, including Pampers diapers and Tide detergent.
PG Stock: Collect Rock-Solid Dividends from Procter & Gamble Co
Income Investors - 4 hours ago
Today's top pick highlights a well-known name to income investors: Procter & Gamble Co (NYSE:PG) stock. It takes just one number to show why PG stock is special: 60.
Stocks Alert =) Procter & Gamble Co (NYSE:PG), Hormel Foods Corp (NYSE:HRL) - usstockjournal
Procter and Gamble Co, The in Tissue and Hygiene Industry in Uzbekistan - MilTech
Trian Fund Management, Lp Buys Procter & Gamble Co, Sells EI du Pont de Nemours
GuruFocus.com - May 17, 2017
New York, NY, based Investment company Trian Fund Management, L.p. buys Procter & Gamble Co, sells E.I. du Pont de Nemours during the 3-months ended 2017-03-31, according to the most recent filings of the investment company, Trian Fund ...
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.

$87.25 Current Price

$45.24 Growth Price (DCF)

Overvalued by 48.15%


Growth Rate Assumed by Market: 21.93%


Future Free Cash Flow Growth Rate: -2.3%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$27.45 Stability Price (EPV)

Overvalued by 68.54%


Discount Rate: 15.0%

$65.12 Book Price

Overvalued by 25.37%


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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