Better Bet Than Procter & Gamble Stock: Pay Less To Get More From Industry Peer
CL is PG’s peer in Personal Care Products industry that has:
1) Lower valuation (P/EBIT) compared to PG
2) But higher revenue and operating income growth
This disconnect between valuation and performance could mean that you are better off buying CL stock vs PG
Key Metrics Compared
- Pay Less, Gain More: PG Tops Estee Lauder Companies Stock
- A Decade of Rewards: $71 Bil From Procter & Gamble Stock
- Why PG Could Outperform Estee Lauder Companies Stock
- PG Looks Smarter Buy Than Estee Lauder Companies Stock
- Pay Less, Gain More: PG Tops Estee Lauder Companies Stock
- After Estee Lauder Companies Stock’s 11% Climb in a Week, Procter & Gamble Stock Looks Like the Stronger Long-Term Play
| Metric | PG | CL |
|---|---|---|
| P/EBIT* | 18.2x | 17.4x |
| LTM OpInc Growth | -0.9% | 3.2% |
| 3Y Avg OpInc Growth | 4.3% | 5.2% |
| LTM Revenue Growth | -0.2% | 1.0% |
| 3Y Avg Revenue Growth | 1.8% | 4.5% |
Uncover more peer insights on Procter & Gamble peer comparison and Procter & Gamble counter-intuitive comparison
OpInc = Operating Income, P/EBIT = Price To Operating Income Ratio
That is one way to look at stocks. Trefis High Quality Portfolio evaluates much more, and is designed to reduce stock-specific risk while giving upside exposure
Is The Mismatch In Stock Price Temporary
One way to check if Procter & Gamble stock is expensive now versus the other tickers would be to see how these metrics compared across companies exactly a year ago. Specifically, if there has been a marked reversal in the trend for Procter & Gamble in the last 12 months, then there is a chance that the current mismatch is likely to reverse. On the other hand, a persistent underperformance in revenue and operating income growth for Procter & Gamble would reinforce the conclusion that the stock is expensive compared to its peers, but may not revert soon
Key Metrics Compared 1 Yr Prior
| Metric | PG | CL |
|---|---|---|
| P/EBIT* | 19.1x | 18.6x |
| LTM OpInc Growth | -0.3% | 6.0% |
| 3Y Avg OpInc Growth | 4.6% | 3.8% |
| LTM Revenue Growth | 0.5% | 3.3% |
| 3Y Avg Revenue Growth | 2.5% | 4.9% |
OpInc = Operating Income
Additional Metrics To Consider
| Metric | PG | CL |
|---|---|---|
| P/S | 4.4x | 3.6x |
| Market Cap (Current) | $ 368.63 Bil | $ 72.74 Bil |
| LTM Revenue | $ 83.93 Bil | $ 19.95 Bil |
| LTM Opinc | $ 19.98 Bil | $ 4.36 Bil |
| LTM Op Margin | 23.8% | 21.8% |
OpInc = Operating Income
Alternate buying based on valuation, while attractive, needs to be evaluated carefully from multiple angles. Such multi-factor analysis is exactly how we construct Trefis portfolio strategies. If you want upside with a smoother ride than an individual stock, consider the High Quality portfolio, which has outperformed the S&P, and clocked >91% returns since inception.