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. Both the health and profitability get an excellent rating, making PG a very profitable company, without any liquidiy or solvency issues. PG is valued expensive and it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year PG was profitable.
In the past year PG had a positive cash flow from operations.
PG had positive earnings in each of the past 5 years.
PG had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
PG has a Return On Assets of 12.36%. This is comparable to the rest of the industry: PG outperforms 58.33% of its industry peers.
PG has a Return On Equity (29.09%) which is comparable to the rest of the industry.
With a decent Return On Invested Capital value of 18.35%, PG is doing good in 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 3 year average ROIC (16.90%) for PG is below the current ROIC(18.35%), indicating increased profibility in the last year.
| 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's Profit Margin of 18.12% is amongst the best of the industry. PG outperforms 100.00% of its industry peers.
In the last couple of years the Profit Margin of PG has grown nicely.
PG has a better Operating Margin (24.23%) than 100.00% of its industry peers.
PG's Operating Margin has improved in the last couple of years.
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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), PG is creating value.
PG has less shares outstanding than it did 1 year ago.
The number of shares outstanding for PG has been reduced compared to 5 years ago.
The debt/assets ratio for PG has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 5.72 indicates that PG is not in any danger for bankruptcy at the moment.
The Altman-Z score of PG (5.72) is better than 75.00% of its industry peers.
PG has a debt to FCF ratio of 2.27. This is a good value and a sign of high solvency as PG would need 2.27 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.27, PG belongs to the top 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.
PG has a Debt to Equity ratio of 0.46. This is in the better half of the industry: PG outperforms 75.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.46 | ||
| Debt/FCF | 2.27 | ||
| Altman-Z | 5.72 |
ROIC/WACC2.12
WACC8.65%
2.3 Liquidity
PG has a Current Ratio of 0.71. This is a bad value and indicates that PG is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Current ratio value of 0.71, PG is not doing good in the industry: 91.67% of the companies in the same industry are doing better.
PG has a Quick Ratio of 0.71. This is a bad value and indicates that PG is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.50, PG is not doing good in the industry: 75.00% of the companies in the same industry are doing better.
PG does not score too well on the current and quick ratio evaluation. However, as it has 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.
Measured over the past 5 years, PG shows a small growth in Earnings Per Share. The EPS has been growing by 7.78% on average per year.
The Revenue has decreased by -0.16% in the past year.
The Revenue has been growing slightly by 4.42% on average over the past years.
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
PG is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 5.00% yearly.
Based on estimates for the next years, PG will show a small growth in Revenue. The Revenue will grow by 2.81% on average per year.
EPS Next Y5.81%
EPS Next 2Y4.56%
EPS Next 3Y5.13%
EPS Next 5Y5%
Revenue Next Year-0.13%
Revenue Next 2Y1.36%
Revenue Next 3Y2.09%
Revenue Next 5Y2.81%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
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
Based on the Price/Earnings ratio of 23.27, the valuation of PG can be described as rather expensive.
Based on the Price/Earnings ratio, PG is valued a bit more expensive than 66.67% of the companies in the same industry.
PG's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.30.
With a Price/Forward Earnings ratio of 21.80, PG is valued on the expensive side.
PG's Price/Forward Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.76, PG is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.27 | ||
| Fwd PE | 21.8 |
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.
Based on the Price/Free Cash Flow ratio, PG is valued a bit more expensive than the industry average as 75.00% of the companies are valued more cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.51 | ||
| EV/EBITDA | 16.94 |
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
PEG (5Y)2.99
EPS Next 2Y4.56%
EPS Next 3Y5.13%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.67%, PG has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 2.93, PG has a dividend in line with its industry peers.
PG's Dividend Yield is comparable with the S&P500 average which is at 2.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.67% |
5.2 History
The dividend of PG has a limited annual growth rate of 5.65%.
PG has been paying a dividend for at least 10 years, so it has a reliable track record.
PG has not decreased their dividend for at least 10 years, which is a reliable track record.
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 2Y4.56%
EPS Next 3Y5.13%
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 | 2.67% |
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)0.38%
PT rev (3m)-3.21%
EPS NQ rev (1m)0.08%
EPS NQ rev (3m)-6.02%
EPS NY rev (1m)0.06%
EPS NY rev (3m)-2.1%
Revenue NQ rev (1m)0.09%
Revenue NQ rev (3m)-1.02%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)-0.78%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.27 | ||
| Fwd PE | 21.8 | ||
| P/S | 4.39 | ||
| P/FCF | 24.51 | ||
| P/OCF | 19.81 | ||
| P/B | 7.04 | ||
| P/tB | N/A | ||
| EV/EBITDA | 16.94 |
EPS(TTM)6.75
EY4.3%
EPS(NY)7.2
Fwd EY4.59%
FCF(TTM)6.41
FCFY4.08%
OCF(TTM)7.93
OCFY5.05%
SpS35.8
BVpS22.3
TBVpS-4.28
PEG (NY)4
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 | 5.72 |
F-Score7
WACC8.65%
ROIC/WACC2.12
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 2Y4.56%
EPS Next 3Y5.13%
EPS Next 5Y5%
Revenue 1Y (TTM)-0.16%
Revenue growth 3Y3.35%
Revenue growth 5Y4.42%
Sales Q2Q%-2.07%
Revenue Next Year-0.13%
Revenue Next 2Y1.36%
Revenue Next 3Y2.09%
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%