PROCTER & GAMBLE CO/THE (PG) Stock Fundamental Analysis
NYSE:PG - New York Stock Exchange, Inc. - US7427181091 - Common Stock - Currency: USD
Taking everything into account, PG scores 6 out of 10 in our fundamental rating. PG was compared to 12 industry peers in the Household Products industry. PG gets an excellent profitability rating and is at the same time showing great financial health properties. PG has a expensive valuation and it also scores bad on growth.
1. Profitability
1.1 Basic Checks
PG had positive earnings in the past year.
In the past year PG had a positive cash flow from operations.
PG had positive earnings in each of the past 5 years.
Each year in the past 5 years PG had a positive operating cash flow.
1.2 Ratios
PG has a Return On Assets (12.36%) which is comparable to the rest of the industry.
PG has a Return On Equity (29.09%) which is in line with its industry peers.
Looking at the Return On Invested Capital, with a value of 18.35%, PG is in the better half of the industry, outperforming 66.67% of the companies in the same industry.
PG had an Average Return On Invested Capital over the past 3 years of 16.90%. This is in line with the industry average of 15.82%.
The last Return On Invested Capital (18.35%) for PG is above the 3 year average (16.90%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.36% | ||
| ROE | 29.09% | ||
| ROIC | 18.35% |
ROA(3y)12.05%
ROA(5y)11.7%
ROE(3y)30.21%
ROE(5y)29.67%
ROIC(3y)16.9%
ROIC(5y)16.08%
1.3 Margins
PG has a better Profit Margin (18.12%) than 100.00% of its industry peers.
PG's Profit Margin has improved in the last couple of years.
PG's Operating Margin of 24.23% is amongst the best of the industry. PG outperforms 100.00% of its industry peers.
In the last couple of years the Operating Margin of PG has grown nicely.
PG has a Gross Margin of 51.51%. This is amongst the best in the industry. PG outperforms 83.33% of its industry peers.
In the last couple of years the Gross Margin of PG has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 24.23% | ||
| PM (TTM) | 18.12% | ||
| GM | 51.51% |
OM growth 3Y0.15%
OM growth 5Y2.1%
PM growth 3Y-1.98%
PM growth 5Y26.46%
GM growth 3Y0.17%
GM growth 5Y0.73%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so PG is creating value.
Compared to 1 year ago, PG has less shares outstanding
The number of shares outstanding for PG has been reduced compared to 5 years ago.
PG has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 5.75 indicates that PG is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 5.75, PG is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
The Debt to FCF ratio of PG is 2.27, which is a good value as it means it would take PG, 2.27 years of fcf income to pay off all of its debts.
With an excellent Debt to FCF ratio value of 2.27, PG belongs to the best of the industry, outperforming 83.33% of the companies in the same industry.
A Debt/Equity ratio of 0.46 indicates that PG is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.46, PG is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.46 | ||
| Debt/FCF | 2.27 | ||
| Altman-Z | 5.75 |
ROIC/WACC2.14
WACC8.57%
2.3 Liquidity
A Current Ratio of 0.71 indicates that PG may have some problems paying its short term obligations.
The Current ratio of PG (0.71) is worse than 91.67% of its industry peers.
A Quick Ratio of 0.50 indicates that PG may have some problems paying its short term obligations.
The Quick ratio of PG (0.50) is worse than 75.00% of its industry peers.
The current and quick ratio evaluation for PG is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.71 | ||
| Quick Ratio | 0.5 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 2.90% over the past year.
PG shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 7.78% yearly.
PG shows a decrease in Revenue. In the last year, the revenue decreased by -0.16%.
PG shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.42% yearly.
EPS 1Y (TTM)2.9%
EPS 3Y5.2%
EPS 5Y7.78%
EPS Q2Q%1.32%
Revenue 1Y (TTM)-0.16%
Revenue growth 3Y3.35%
Revenue growth 5Y4.42%
Sales Q2Q%-2.07%
3.2 Future
Based on estimates for the next years, PG will show a small growth in Earnings Per Share. The EPS will grow by 5.00% on average per year.
The Revenue is expected to grow by 2.81% on average over the next years.
EPS Next Y5.81%
EPS Next 2Y4.53%
EPS Next 3Y5.1%
EPS Next 5Y5%
Revenue Next Year-0.14%
Revenue Next 2Y1.3%
Revenue Next 3Y2.06%
Revenue Next 5Y2.81%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
PG is valuated rather expensively with a Price/Earnings ratio of 23.27.
PG's Price/Earnings ratio is a bit more expensive when compared to the industry. PG is more expensive than 66.67% of the companies in the same industry.
PG is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.30, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 21.81, which indicates a rather expensive current valuation of PG.
The rest of the industry has a similar Price/Forward Earnings ratio as PG.
PG's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 21.76.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.27 | ||
| Fwd PE | 21.81 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, PG is valued a bit more expensive than 75.00% of the companies in the same industry.
75.00% of the companies in the same industry are cheaper than PG, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.51 | ||
| EV/EBITDA | 17.08 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates PG does not grow enough to justify the current Price/Earnings ratio.
PG has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)4.01
PEG (5Y)2.99
EPS Next 2Y4.53%
EPS Next 3Y5.1%
5. Dividend
5.1 Amount
PG has a Yearly Dividend Yield of 2.63%.
Compared to an average industry Dividend Yield of 2.98, PG has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.37, PG has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.63% |
5.2 History
The dividend of PG has a limited annual growth rate of 5.65%.
PG has paid a dividend for at least 10 years, which is a reliable track record.
PG has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)5.65%
Div Incr Years34
Div Non Decr Years34
5.3 Sustainability
PG pays out 64.24% of its income as dividend. This is not a sustainable payout ratio.
The dividend of PG is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP64.24%
EPS Next 2Y4.53%
EPS Next 3Y5.1%
157.05
-1.44 (-0.91%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupHousehold & Personal Products
GICS IndustryHousehold Products
Earnings (Last)
Earnings (Next)
Inst Owners70.1%
Inst Owner Change0%
Ins Owners0.04%
Ins Owner Change-0.47%
Market Cap368.21B
Analysts78.29
Price Target178.02 (13.35%)
Short Float %0.63%
Short Ratio1.8
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.63% |
Yearly Dividend3.95
Dividend Growth(5Y)5.65%
DP64.24%
Div Incr Years34
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-1.83%
Min EPS beat(2)-1.99%
Max EPS beat(2)-1.67%
EPS beat(4)0
Avg EPS beat(4)-1.47%
Min EPS beat(4)-1.99%
Max EPS beat(4)-0.96%
EPS beat(8)4
Avg EPS beat(8)0.95%
EPS beat(12)5
Avg EPS beat(12)0.02%
EPS beat(16)6
Avg EPS beat(16)-0.18%
Revenue beat(2)0
Avg Revenue beat(2)-2.94%
Min Revenue beat(2)-4.5%
Max Revenue beat(2)-1.38%
Revenue beat(4)0
Avg Revenue beat(4)-3.37%
Min Revenue beat(4)-4.5%
Max Revenue beat(4)-1.38%
Revenue beat(8)0
Avg Revenue beat(8)-2.78%
Revenue beat(12)1
Avg Revenue beat(12)-2.32%
Revenue beat(16)4
Avg Revenue beat(16)-1.76%
PT rev (1m)0.32%
PT rev (3m)-3.21%
EPS NQ rev (1m)0.04%
EPS NQ rev (3m)-7.05%
EPS NY rev (1m)0.05%
EPS NY rev (3m)-2.11%
Revenue NQ rev (1m)0.04%
Revenue NQ rev (3m)-1.54%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)-1.06%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.27 | ||
| Fwd PE | 21.81 | ||
| P/S | 4.39 | ||
| P/FCF | 24.51 | ||
| P/OCF | 19.81 | ||
| P/B | 7.04 | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.08 |
EPS(TTM)6.75
EY4.3%
EPS(NY)7.2
Fwd EY4.58%
FCF(TTM)6.41
FCFY4.08%
OCF(TTM)7.93
OCFY5.05%
SpS35.8
BVpS22.3
TBVpS-4.28
PEG (NY)4.01
PEG (5Y)2.99
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.36% | ||
| ROE | 29.09% | ||
| ROCE | 22.92% | ||
| ROIC | 18.35% | ||
| ROICexc | 20.45% | ||
| ROICexgc | 94.06% | ||
| OM | 24.23% | ||
| PM (TTM) | 18.12% | ||
| GM | 51.51% | ||
| FCFM | 17.9% |
ROA(3y)12.05%
ROA(5y)11.7%
ROE(3y)30.21%
ROE(5y)29.67%
ROIC(3y)16.9%
ROIC(5y)16.08%
ROICexc(3y)18.64%
ROICexc(5y)18.08%
ROICexgc(3y)84.41%
ROICexgc(5y)84.26%
ROCE(3y)22.01%
ROCE(5y)21.21%
ROICexcg growth 3Y2.85%
ROICexcg growth 5Y6.24%
ROICexc growth 3Y4.33%
ROICexc growth 5Y7.11%
OM growth 3Y0.15%
OM growth 5Y2.1%
PM growth 3Y-1.98%
PM growth 5Y26.46%
GM growth 3Y0.17%
GM growth 5Y0.73%
F-Score7
Asset Turnover0.68
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.46 | ||
| Debt/FCF | 2.27 | ||
| Debt/EBITDA | 1.04 | ||
| Cap/Depr | 123.4% | ||
| Cap/Sales | 4.24% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 80.04% | ||
| Profit Quality | 98.82% | ||
| Current Ratio | 0.71 | ||
| Quick Ratio | 0.5 | ||
| Altman-Z | 5.75 |
F-Score7
WACC8.57%
ROIC/WACC2.14
Cap/Depr(3y)113.32%
Cap/Depr(5y)108.77%
Cap/Sales(3y)3.87%
Cap/Sales(5y)3.92%
Profit Quality(3y)100.99%
Profit Quality(5y)105.25%
High Growth Momentum
Growth
EPS 1Y (TTM)2.9%
EPS 3Y5.2%
EPS 5Y7.78%
EPS Q2Q%1.32%
EPS Next Y5.81%
EPS Next 2Y4.53%
EPS Next 3Y5.1%
EPS Next 5Y5%
Revenue 1Y (TTM)-0.16%
Revenue growth 3Y3.35%
Revenue growth 5Y4.42%
Sales Q2Q%-2.07%
Revenue Next Year-0.14%
Revenue Next 2Y1.3%
Revenue Next 3Y2.06%
Revenue Next 5Y2.81%
EBIT growth 1Y0.07%
EBIT growth 3Y3.51%
EBIT growth 5Y6.61%
EBIT Next Year17.4%
EBIT Next 3Y8.63%
EBIT Next 5Y6.59%
FCF growth 1Y23.16%
FCF growth 3Y1.97%
FCF growth 5Y6.79%
OCF growth 1Y22.11%
OCF growth 3Y2.61%
OCF growth 5Y5.42%