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In today's rapidly changing and highly competitive business world, it is imperative for investors and industry observers to carefully assess companies before making investment choices. In this article, we will undertake a comprehensive industry comparison, evaluating Procter & Gamble (NYSE:PG) vis-à-vis its key competitors in the Household Products industry. Through a detailed analysis of important financial indicators, market standing, and growth potential, our goal is to provide valuable insights and highlight company's performance in the industry.
Since its founding in 1837, Procter & Gamble has become one of the world's largest consumer product manufacturers, generating more than $80 billion in annual sales. It operates with a lineup of leading brands, including more than 20 that generate north of $1 billion each in annual global sales, such as Tide laundry detergent, Charmin toilet paper, Pantene shampoo, and Pampers diapers. P&G sold its last remaining food brand, Pringles, to Kellogg in calendar 2012. Sales outside its home turf represent around 53% of the firm's consolidated total.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Procter & Gamble Co | 26.78 | 7.85 | 4.82 | 7.6% | $5.54 | $10.34 | 0.63% |
| Colgate-Palmolive Co | 30.51 | 342.87 | 4.03 | 162.81% | $1.2 | $3.04 | 6.18% |
| Kimberly-Clark Corp | 25.32 | 44.50 | 2.29 | 66.05% | $1.03 | $1.91 | -0.89% |
| Church & Dwight Co Inc | 33.37 | 6.29 | 4.39 | 5.72% | $0.37 | $0.69 | 5.14% |
| Clorox Co | 68.84 | 182.26 | 2.32 | -70.83% | $0.04 | $0.77 | -5.27% |
| Reynolds Consumer Products Inc | 17.55 | 2.91 | 1.56 | 2.47% | $0.12 | $0.2 | -4.69% |
| WD-40 Co | 43.40 | 13.65 | 5.27 | 7.16% | $0.02 | $0.07 | 6.85% |
| Central Garden & Pet Co | 14.97 | 1.48 | 0.67 | 4.18% | $0.12 | $0.28 | -0.98% |
| Energizer Holdings Inc | 25.07 | 11.10 | 0.74 | 17.91% | $0.11 | $0.25 | -3.04% |
| Oil-Dri Corp of America | 10.62 | 2.22 | 1.45 | 3.9% | $0.02 | $0.03 | 1.28% |
| Average | 29.96 | 67.48 | 2.52 | 22.15% | $0.34 | $0.8 | 0.51% |
Upon a comprehensive analysis of Procter & Gamble, the following trends can be discerned:
With a Price to Earnings ratio of 26.78, which is 0.89x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.
With a Price to Book ratio of 7.85, significantly falling below the industry average by 0.12x, it suggests undervaluation and the possibility of untapped growth prospects.
With a relatively high Price to Sales ratio of 4.82, which is 1.91x the industry average, the stock might be considered overvalued based on sales performance.
The Return on Equity (ROE) of 7.6% is 14.55% below the industry average, suggesting potential inefficiency in utilizing equity to generate profits.
The company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $5.54 Billion, which is 16.29x above the industry average, indicating stronger profitability and robust cash flow generation.
Compared to its industry, the company has higher gross profit of $10.34 Billion, which indicates 12.92x above the industry average, indicating stronger profitability and higher earnings from its core operations.
With a revenue growth of 0.63%, which surpasses the industry average of 0.51%, the company is demonstrating robust sales expansion and gaining market share.
The debt-to-equity (D/E) ratio is a key indicator of a company's financial health and its reliance on debt financing.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
In light of the Debt-to-Equity ratio, a comparison between Procter & Gamble and its top 4 peers reveals the following information:
In terms of the debt-to-equity ratio, Procter & Gamble has a lower level of debt compared to its top 4 peers, indicating a stronger financial position.
This implies that the company relies less on debt financing and has a more favorable balance between debt and equity with a lower debt-to-equity ratio of 0.65.
For Procter & Gamble, the PE and PB ratios are low compared to peers, indicating potential undervaluation. However, the high PS ratio suggests overvaluation based on revenue. The low ROE implies lower profitability compared to peers, while high EBITDA and gross profit indicate strong operational performance. Additionally, the high revenue growth suggests a positive outlook for future earnings potential within the Household Products industry.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
Posted In: PG
