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In today's fast-paced and highly competitive business world, it is crucial for investors and industry followers to conduct comprehensive company evaluations. In this article, we will delve into an extensive industry comparison, evaluating Procter & Gamble (NYSE:PG) in relation to its major competitors in the Household Products industry. By closely examining key financial metrics, market standing, and growth prospects, our objective 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 | 27.92 | 7.99 | 4.94 | 6.29% | $4.85 | $10.18 | 1.67% |
| Colgate-Palmolive Co | 29.44 | 670.74 | 4.17 | 414.16% | $1.25 | $3.07 | 4.89% |
| Kimberly-Clark Corp | 20.36 | 40.81 | 2.30 | 49.91% | $0.84 | $1.81 | -2.05% |
| Church & Dwight Co Inc | 30.84 | 5.68 | 4.12 | 5.79% | $0.4 | $0.71 | 3.92% |
| Clorox Co | 63.41 | 54.02 | 2.51 | 103.1% | $0.3 | $0.88 | 4.91% |
| Reynolds Consumer Products Inc | 17.86 | 2.96 | 1.59 | 2.47% | $0.12 | $0.2 | -4.69% |
| WD-40 Co | 48.99 | 15.20 | 5.89 | 9.02% | $0.03 | $0.08 | 9.4% |
| Central Garden & Pet Co | 14.59 | 1.44 | 0.65 | 4.18% | $0.12 | $0.28 | -0.98% |
| Energizer Holdings Inc | 24.78 | 10.97 | 0.73 | 17.91% | $0.11 | $0.25 | -3.04% |
| Oil-Dri Corp of America | 10.98 | 2.29 | 1.50 | 3.9% | $0.02 | $0.03 | 1.28% |
| Average | 29.03 | 89.35 | 2.61 | 67.83% | $0.35 | $0.81 | 1.52% |
By closely examining Procter & Gamble, we can identify the following trends:
The stock's Price to Earnings ratio of 27.92 is lower than the industry average by 0.96x, suggesting potential value in the eyes of market participants.
With a Price to Book ratio of 7.99, significantly falling below the industry average by 0.09x, it suggests undervaluation and the possibility of untapped growth prospects.
The Price to Sales ratio of 4.94, which is 1.89x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
The Return on Equity (ROE) of 6.29% is 61.54% below the industry average, suggesting potential inefficiency in utilizing equity to generate profits.
Compared to its industry, the company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $4.85 Billion, which is 13.86x above the industry average, indicating stronger profitability and robust cash flow generation.
With higher gross profit of $10.18 Billion, which indicates 12.57x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.
The company's revenue growth of 1.67% exceeds the industry average of 1.52%, indicating strong sales performance and market outperformance.
The debt-to-equity (D/E) ratio is an important measure to assess the financial structure and risk profile of a company.
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.
By considering the Debt-to-Equity ratio, Procter & Gamble can be compared to its top 4 peers, leading to the following observations:
Among its top 4 peers, Procter & Gamble has a stronger financial position with a lower debt-to-equity ratio of 0.64.
This indicates that the company relies less on debt financing and maintains a more favorable balance between debt and equity, which can be viewed positively by investors.
For Procter & Gamble, the PE and PB ratios are low compared to peers in the Household Products industry, indicating potential undervaluation. However, the high PS ratio suggests overvaluation based on revenue. In terms of ROE, EBITDA, gross profit, and revenue growth, Procter & Gamble shows lower performance compared to industry peers, which may impact its overall valuation within the sector.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
Posted In: PG
