Procter & Gamble Propped Up By Solid Financials and YoY Growth

Founded in 1837 and headquartered in Cincinnati, Ohio, Proctor & Gamble is considered a blue-chip stock that provides branded consumer packaged goods to its customer base worldwide. With brands including Head & Shoulders, Olay, Safeguard, Pantene, Gillette, Oral-B, Vicks and Dawn among others, PG is a consumer staples giant and dominates the worldwide market for a wide range of essential products that consumers use each day. Apart from its world beating brands, the key advantages in the Company’s business include its dominating industry positioning in various markets and its efficient marketing and supply chain operations. In its most recently announced financial results for FY ended April 2020, Proctor & Gamble reported sales of US$ 70.9 Bn which were up 5% YoY. Net sales growth was driven primarily by a double digit increase in Health Care segment, a high single digit increase in Fabric & Home Care segment, a mid-single digit increase in Beauty segment and a low single digit increase in Baby, Feminine & Family Care segment. Excluding acquisitions and divestures, the Company’s core organic sales increased by 6% YoY with a 4% YoY organic growth in volumes. Operating Income was reported at US$ 15.7 Bn which was significantly higher than the operating income of US$ 5.4 Bn reported in 2019. It is pertinent to note that FY 2019 included the impact of US$ 8.3 Bn non-cash impairment charges relating to intangible assets. Excluding the impact of these impairment charges, operating income grew by circa US$ 1.9 Bn or 37% YoY depicting improvement in topline and operating margins. Net earnings increased from US$ 3.9 Bn in 2019 to US$ 13.02 Bn in 2020 whereas excluding the impact of the impairment charges discussed above, net earnings grew by 21% YoY driven by the strong profitability and topline performance of the Company. Core EPS of the Company increased by 13% YoY to US$ 5.12 per share. The Company also reported solid cash flow generation whereby its cash flow from operating activities was reported at US$ 17.4 Bn as of FY 2020 which was circa 14% higher than the cash flow from operations of US$ 15.2 Bn recorded in FY 2019. The strength of the Company’s credit profile is depicted by long term credit ratings of Aa3 (Moody's) and AA- (Standard & Poor's) with a stable outlook.

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kvermeer

Oct 14, 2020

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Change % Since Posting

144.34

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PG

Procter & Gamble Co.

144.34

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Current Price

Procter & Gamble Propped Up By Solid Financials and YoY Growth

bullish
Founded in 1837 and headquartered in Cincinnati, Ohio, Proctor & Gamble is considered a blue-chip stock that provides branded consumer packaged goods to its customer base worldwide. With brands including Head & Shoulders, Olay, Safeguard, Pantene, Gillette, Oral-B, Vicks and Dawn among others, PG is a consumer staples giant and dominates the worldwide market for a wide range of essential products that consumers use each day. Apart from its world beating brands, the key advantages in the Company’s business include its dominating industry positioning in various markets and its efficient marketing and supply chain operations. In its most recently announced financial results for FY ended April 2020, Proctor & Gamble reported sales of US$ 70.9 Bn which were up 5% YoY. Net sales growth was driven primarily by a double digit increase in Health Care segment, a high single digit increase in Fabric & Home Care segment, a mid-single digit increase in Beauty segment and a low single digit increase in Baby, Feminine & Family Care segment. Excluding acquisitions and divestures, the Company’s core organic sales increased by 6% YoY with a 4% YoY organic growth in volumes. Operating Income was reported at US$ 15.7 Bn which was significantly higher than the operating income of US$ 5.4 Bn reported in 2019. It is pertinent to note that FY 2019 included the impact of US$ 8.3 Bn non-cash impairment charges relating to intangible assets. Excluding the impact of these impairment charges, operating income grew by circa US$ 1.9 Bn or 37% YoY depicting improvement in topline and operating margins. Net earnings increased from US$ 3.9 Bn in 2019 to US$ 13.02 Bn in 2020 whereas excluding the impact of the impairment charges discussed above, net earnings grew by 21% YoY driven by the strong profitability and topline performance of the Company. Core EPS of the Company increased by 13% YoY to US$ 5.12 per share. The Company also reported solid cash flow generation whereby its cash flow from operating activities was reported at US$ 17.4 Bn as of FY 2020 which was circa 14% higher than the cash flow from operations of US$ 15.2 Bn recorded in FY 2019. The strength of the Company’s credit profile is depicted by long term credit ratings of Aa3 (Moody's) and AA- (Standard & Poor's) with a stable outlook.
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149.00

Target Price

6/ 10

Confidence

2-6 Months

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