Procter & Gamble Stock Has Risen 1.7x Since 2018 – Well Deserved?

+4.70%
Upside
146
Market
153
Trefis
PG: Procter & Gamble logo
PG
Procter & Gamble

Procter & Gamble’s (NYSE: PG) stock price grew 70% from $92 in 2018 end to around $156 currently, primarily due to a significant jump in the P/S multiple. Steady revenue growth has also helped, and stock price gains were further supported by a slight decrease in the outstanding share count.

In our interactive dashboard, Why Procter & Gamble Stock Moved: PG Stock Has Gained 70% Since 2018, we break down the factors behind this move.

(A) PG’s Total Revenue has grown 14% from $66.8 billion in 2018 to over $76 billion in 2020, and currently stands at around the same level

  • PG’s total revenue has grown from $66.8 billion in 2018 to $76.1 billion in 2020 (PG’s fiscal year ends in June), led primarily by a steady rise in fabric and home care sales, and a revival in beauty product sales after the pandemic.
  • These products have helped Procter & Gamble post consistent sales growth in both the United States and international markets.
  • Additionally, PG’s health care, and baby, feminine and family segments have also seen steady growth over the years, while the grooming segment has seen the slowest growth.
  • Additionally, for details about PG revenues and comparison to peers, see Procter & Gamble (PG) Revenue Comparison
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(B) Revenue per share (RPS) increased from $25.70 in 2018 to $30.27 in 2021 and currently stands around the same level

  • PG revenue jumped from $66.8 billion in 2018 to $76.1 billion in 2021, while the outstanding share count first increased from 2.6 billion in 2018 to 2.7 billion in 2019, before dropping to around 2.5 billion currently.
  • Due to this, RPS has risen from $25.70 in FY ’18 to over $30 currently.

(C) Price-To-Sales (P/S) multiple for PG has risen steadily since 2018 and is more than 1.5x that of 2018 levels, going from 3.3x in 2018 to 5.2x in late-2021

  • Procter & Gamble’s exceptional performance since 2018-end has seen its P/S multiple rise from 3.3x in 2018 to over 5x currently.
  • PG has also reported strong Q2 ’21 earnings recently, with revenue rising from $19.7 billion in Q2 ’20 to $20.9 billion in Q2 ’21 and EPS rising from $1.53 to $1.72 over this period.
  • This sustained performance means that PG warrants its steadily growing PS multiple.
  • For additional details about the company’s historical returns and comparison to peers, see Procter & Gamble (PG) Stock Return.

What if you’re looking for a more balanced portfolio instead? Here’s a high-quality portfolio that’s beaten the market consistently since the end of 2016.

 Returns Mar 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 PG Return 0% -5% 85%
 S&P 500 Return 0% -8% 95%
 Trefis MS Portfolio Return 0% -10% 254%

[1] Month-to-date and year-to-date as of 3/1/2022
[2] Cumulative total returns since the end of 2016

 

 

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