Overview - In which business areas is PG active?
The Procter & Gamble Company (PG) focuses on providing branded consumer products to consumers in approximately 180 countries around the world, according to Reuters. PG serves its customers by selling through wholesalers, e-commerce (including social commerce channels), grocery stores, membership club stores, drugstores, department stores, distributors, wholesalers, specialty beauty stores (including airport duty-free stores), high-frequency stores, pharmacies, electronics stores and professional channels.
The brand giant PG is active in the areas of Beauty, Grooming, Health Care, Fabric & Home Care and Baby, Feminine & Family Care. Its best-known brands include Head & Shoulders, Gillette, Venus, Ariel and Always.
According to PG, it currently employs 108,000 people. According to the Trader Workstation (TWS), the company is currently worth USD 408.8 billion. This makes PG the most valuable listed consumer goods manufacturer in the world.
Before the quarterly figures - How is the brand giant PG starting the 2025 financial year?
PG will publish its quarterly figures for Q1 2025 on 18.10.2024. PG has been convincing in the recent past. Since the beginning of the year, the share price has risen by 18.5% and the dividend yield is 2%.
A year ago, the share was trading at USD 145.80; it currently stands at USD 173.50. Since 2020, PG has gained 40%, excluding dividends. Accordingly, short, medium and long-term investors should be satisfied with the share price performance.
After the year 2023 served as a consolidation phase, PG to an all-time high of USD 177.79 on 10.09.2024.
These figures are derived from the Trader Workstation chart display on 15.10.2024. TOGGLE's artificial intelligence predicts very low volatility for the coming quarterly figures.
If the quarterly figures are better than expected, this will lead to an average increase of 0.73% one month after the figures are announced, according to TOGGLE.
In the negative scenario, PG underperforms the expected quarterly figures. According to TOGGLE, this scenario leads to an average loss of 1.24% one month after the figures are announced.
Fundamental data analysis - The strengths and weaknesses of PG
Aus vergangenen Finanz- und Geschäftsdaten lassen sich in der Fundamentalanalyse Rückschlüsse auf die aktuelle Lage eines Unternehmens ziehen. Hierbei sind Faktoren wie Verschuldung, Gewinn und Cashflow von großer Bedeutung. Um diese Kennzahlen angemessen zu interpretieren, ist es entscheidend, sie in Relation zu einem Vergleichsuniversum zu setzen. Auf diese Weise lässt sich beurteilen, ob das Unternehmen im Vergleich zu anderen in seiner Branche eine eher starke oder schwache Position einnimmt.
Is PG crisis-proof? - A look at the balance sheet
PG's balance sheet leaves no doubt about the strength of the global group. Equity has grown by 10% in the last 4 years, while liabilities have fallen at the same time.
PG was able to reduce its debt and reported a debt ratio of 58.7% for the 2024 financial year. The coverage ratio A, which is the ratio of equity to fixed assets, has been above 2 for four years and is therefore extremely positive. PG can cover the fixed assets used twice from its equity. For comparison: Nike, the largest sports equipment supplier in the world, achieved a coverage ratio of slightly over 1 in the 2021-2023 financial years.
A related point of criticism in PG's balance sheet, on the other hand, is that the company relies on current assets at 80%. Current assets are generally only tied up in the company for a short time and are more expensive to acquire than fixed assets. In addition, no scheduled depreciation is possible for current assets. All financial data presented here was calculated on the basis of Yahoo Finance.
How profitable is PG?
PG's profitability is impressive. In the 2024 financial year, the Group operated with a net return on equity of 29.6% and a net return on sales of 17.7%. In the previous year, these figures were even better at 31.3% and 17.9%. PG recorded a slight increase in the net return on assets from 12.1% to 12.2%. PG achieved a four-year high of 23.6% for the cash flow margin, which is the ratio of operating cash flow to sales.
Popular fundamental data on PG
PG's current price/earnings ratio (P/E) of 28.9 is significantly more expensive than its largest competitor Unilever at 22.
The price-to-book ratio (P/B ratio) of 8.3 is slightly higher than Unilever's comparable figure of 7.1.
Unilever also offers its shareholders a higher dividend yield of 3% than PG's 2.3%.
Analysts expect PG to generate revenue of USD 22 billion in Q1 2025, an increase of USD 0.5% compared to revenue in Q1 2024. Earnings per share (EPS) of USD 1.90 are also expected.
The data mentioned here comes from Trader Workstation, Yahoo Finance and TOGGLE.
Technical analysis - What picture does the PG chart paint?
On 10.09.2024, PG reached a new all-time high of USD 177.79. Any weakness in PG's price has therefore historically served as an entry opportunity.
It did not look like this, especially in mid-2022, when the share price fell by 22.70% between May and October 2022. At the same time, the benchmark Unilever fell by just 18%.
The strong rise in August in particular helped PG to reach a new all-time high. A look at the current chart shows that PG could continue to grow. With 3 out of 5 positive signals and one negative signal, the Ichimoku indicator points to a slightly rising price trend. In addition, the chart continues to be supported by the 200-day line, currently at USD 163.50, and the 50-day line, currently at USD 171.30.
The relative strength indicator (RSI) indicates whether a share is overbought or oversold. From a level of 70, the share is considered overbought. At a value below 30, the share is considered oversold. According to this chart from TWS, PG is fairly to slightly overvalued at 56 according to the RSI.
Conclusion: The valuation of PG
All in all, PG is a strong, crisis-proof company that has not achieved a new all-time high by chance. The world's largest listed consumer goods manufacturer impresses with growing equity and falling debt.
There is potential for optimization in fixed assets. If PG increases these, scheduled depreciation and potentially lower purchasing costs can further improve efficiency. It would make sense to reallocate more current assets to fixed assets.
In terms of profitability, PG has strong figures such as a net return on equity of just under 30%. The net return on equity and the net return on sales are slightly down on the previous year, while the net return on assets has increased slightly. The cash flow margin is at a four-year high.
Compared to its main competitor Unilever, however, PG is more expensive in terms of P/E ratio, P/B ratio and dividend yield. PG's chart points to a slightly positive development.
PG's strong track record outshines the minor points of criticism, which is why PG is rated here with BUY is to be classified.
