The Procter & Gamble Company Fundamental Analysis (NYSE: PG)
The Procter & Gamble Company Fundamental Analysis (NYSE: PG)
The Procter & Gamble Company (NYSE: PG) shows moderate financial fundamentals with a PE ratio of 21.20, profit margin of 18.44%, and ROE of 29.84%. The company generates $85.4B in annual revenue with weak year-over-year growth of 0.29%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 60.9/100 based on profitability, valuation, growth, and balance sheet metrics. The C+ grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze PG's fundamental strength across five key dimensions:
Efficiency Score
ExcellentPG demonstrates superior asset utilization.
Valuation Score
ModeratePG shows balanced valuation metrics.
Growth Score
WeakPG faces weak or negative growth trends.
Financial Health Score
ModeratePG shows balanced financial health with some risks.
Profitability Score
ExcellentPG achieves industry-leading margins.
Key Financial Metrics
Is PG Expensive or Cheap?
P/E Ratio
PG trades at 21.20 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, PG's PEG of 20.23 indicates potential overvaluation.
Price to Book
The market values The Procter & Gamble Company at 6.38 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 14.83 times EBITDA. This signals the market has high growth expectations.
How Well Does PG Make Money?
Net Profit Margin
For every $100 in sales, The Procter & Gamble Company keeps $18.44 as profit after all expenses.
Operating Margin
Core operations generate 22.69 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $29.84 in profit for every $100 of shareholder equity.
ROA
The Procter & Gamble Company generates $12.68 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
The Procter & Gamble Company produces operating cash flow of $19.94B, showing steady but balanced cash generation.
Free Cash Flow
The Procter & Gamble Company generates strong free cash flow of $15.62B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $6.57 in free cash annually.
FCF Yield
PG converts 4.63% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
21.20
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
20.23
vs 25 benchmark
P/B Ratio
Price to book value ratio
6.38
vs 25 benchmark
P/S Ratio
Price to sales ratio
3.91
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.64
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.68
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.30
vs 25 benchmark
ROA
Return on assets percentage
0.13
vs 25 benchmark
ROCE
Return on capital employed
0.22
vs 25 benchmark
How PG Stacks Against Its Sector Peers
| Metric | PG Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 21.20 | 20.56 | Neutral |
| ROE | 29.84% | 698.00% | Weak |
| Net Margin | 18.44% | -2241.00% (disorted) | Strong |
| Debt/Equity | 0.64 | 0.77 | Neutral |
| Current Ratio | 0.68 | 2.30 | Weak Liquidity |
| ROA | 12.68% | 320.00% | Weak |
PG outperforms its industry in 1 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews The Procter & Gamble Company's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
22.91%
Industry Style: Defensive, Dividend, Low Volatility
High GrowthEPS CAGR
26.87%
Industry Style: Defensive, Dividend, Low Volatility
High GrowthFCF CAGR
5.92%
Industry Style: Defensive, Dividend, Low Volatility
Growing