Consistent Sales Growth Has Helped Procter & Gamble Stock To Match The Market Returns

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PG: Procter & Gamble logo
PG
Procter & Gamble

Procter & Gamble (NYSE: PG) stock price gained almost 60% from around $92 at 2018 end to $146 currently, primarily due to favorable changes in its revenues and P/S multiple. Additionally, the company witnessed a steady rise in its revenue per share, helped by a drop in the outstanding share count. The stock’s gains have helped PG match the S&P’s returns, which posted a little over 60% over the same period.

In our interactive dashboard, Why Procter & Gamble Stock Moved: PG Stock Has Gained 58% Since 2018, we break down the factors behind this move.

(A) PG’s Total Revenue has risen 20% from $66.8 billion in FY 2018 to $80.5 billion currently

  • PG’s total revenue has risen steadily from $66.8 billion in FY ’18 to $80.2 billion in FY ’22 (PG’s fiscal year ends in June), and currently stands slightly higher at $80.5 billion.
  • As of FY ’22, PG’s largest segment is Fabric & Home Care, contributing $27.6 billion to total sales, bringing in almost 35% of the company’s revenues.
  • Besides this, the health care segment has been the fastest growing segment, with sales rising around 20% between FY ’20 and FY ’22, standing at almost $11 billion as of FY ’22.
  • 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 31% from $25.28 in FY 2018 to $33.09 currently

  • PG revenue rose from $66.8 billion in 2018 to $80.5 billion currently, while the outstanding share count dropped from 2.6 billion in 2018 to 2.4 billion currently.
  • Due to this, RPS has risen steadily from $25.28 in FY ’18 to $33.09 currently.

(C) Price-To-Sales (P/S) multiple for PG rose strongly from 3.6x in 2018 to 5.3x by 2021 end but has pulled back to 4.4x currently, still more than 1.2x higher than its 2018 level

  • PG’s P/S multiple rose strongly to around 5.3x by late 2021, on the back of rising investor expectations surrounding continued demand growth for its products across all markets, leading to a rise in the company’s sales.
  • However, due to the increased economic uncertainty weighing on the broader markets, the P/S multiple has pulled back, currently standing at around 4.4x.
  • For additional details about the company stock returns and comparison to peers, see Procter & Gamble (PG) Stock Return Comparison.

What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

 Returns Nov 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 PG Return 8% -11% 73%
 S&P 500 Return 3% -16% 79%
 Trefis Multi-Strategy Portfolio 3% -20% 217%

[1] Month-to-date and year-to-date as of 11/22/2022
[2] Cumulative total returns since the end of 2016

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