Procter & Gamble Co PG

Morningstar Rating
$144.87 +0.92 (0.64%)
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Company Report

Enhancements to the Performance and Value Proposition of Its Brands Underpin Procter & Gamble's Moat

Tempered sales have characterized the last few quarters for wide-moat Procter & Gamble, with flat to low-single-digit organic sales growth lagging the mid- to high-single-digit marks that had characterized the business not that long ago. This was initially a byproduct of more muted price increases (low single digits, down from 7% in the first quarter of 2024). However, we don’t believe this suggests cracks in the firm’s competitive armor. After rightsizing its category and geographic reach by shedding around 100 brands more than 10 years ago, P&G also embraced a more holistic approach to brand spending, including product performance, packaging, brand messaging, execution in stores and online, and the value a product offers its retail partners and consumers. We believe P&G’s strategic aims—investing in product innovation and marketing to support its portfolio of daily-use, essential offerings—should help its brands maintain their clout with retailers and consumers, reinforcing its moat long term.

Price vs Fair Value

PG is trading at a LOCK|KM#NTv premium.
Price
$143.95
Fair Value
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Uncertainty
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1-Star Price
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5-Star Price
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Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

P&G is again gaining share in China (which we estimate at a high-single-digit percentage of sales), with its 4% growth in the fourth quarter outpacing the market's 2% decline. If share gains persist, sales could outpace our expectations.

Bears

North America remains in the doldrums (its largest market at around 50% of sales, down 1% in the fourth quarter); competitive and macro headwinds on its home turf could eventually dilute its brand standing.

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Trading Information

Previous Close Price
$143.95
Day Range
$143.81–145.21
52-Week Range
$137.62–167.25
Bid/Ask
$144.00 / $145.30
Shares Outstanding
2.32B
Market Cap
$336.49B
Volume/Avg
6M / 9M

Key Statistics

Price/Earnings (Normalized)
21.21
Price/Sales
4.01
Dividend Yield (Trailing)
2.98%
Dividend Yield (Forward)
3.02%
Dividend Payment Schedule
Feb, May, Aug, Nov
Total Yield
4.48%

Company Profile

Since its founding in 1837, Procter & Gamble has become one of the world's largest consumer product manufacturers, with annual sales of more than $87 billion. It operates with a lineup of leading brands, including more than 20 that generate annual global sales of more than $1 billion each, such as Tide laundry detergent, Charmin toilet paper, Pantene shampoo, and Pampers diapers. Sales outside the US represent just over half of the firm's consolidated total.
Sector
Consumer Defensive
Industry
Household & Personal Products
Stock Style Box
Large Value
Total Number of Employees
104,000

Competitors

Valuation

Metric
PG
UL
OR
Price/Earnings (Normalized)
21.2117.5829.84
Price/Book Value
6.206.945.85
Price/Sales
4.012.434.39
Price/Cash Flow
18.1719.2122.72
Price/Earnings
PG
UL
OR

Financial Strength

Metric
PG
UL
OR
Quick Ratio
0.410.570.58
Current Ratio
0.680.740.97
Interest Coverage
23.74—19.89
Quick Ratio
PG
UL
OR

Profitability

Metric
PG
UL
OR
Return on Assets (Normalized)
13.14%—11.46%
Return on Equity (Normalized)
31.34%—20.96%
Return on Invested Capital (Normalized)
19.01%—15.09%
Return on Assets
PG
UL
OR

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