The Procter & Gamble Company (NYSE:PG) is focused on providing consumer packaged goods. The company's products are sold in more than 180 countries and territories worldwide primarily through mass merchandisers, grocery stores, membership club stores, drug stores, department stores, salons, e-commerce and high-frequency stores, and the neighborhood stores, which serve many consumers in developing markets.
Performance Report Card
P&G released its third-quarter report on April 23. Global volume increased 3% as well, led by 6% growth in P&G's fabric and home care segment and 2% growth in both the grooming and health care segments. P&G generated $3.17 billion of free cash flow during the quarter and this, paired with the $5.95 billion in cash and cash equivalents it had to begin the quarter. The company ended the quarter with more than $8.18 billion in cash and cash equivalents, so it will likely use this and its future free cash flow to continue to maximize shareholder value.
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- PG 15-Year Financial Data
- The intrinsic value of PG
- Peter Lynch Chart of PG
Declaration of Dividends
PG has been paying a dividend for 124 consecutive years since its incorporation in 1890 and has increased its dividend for 58 consecutive years. The Board of Directors of The Procter & Gamble Company declared a quarterly dividend of $0.6436 per share on the Common Stock and on the Series A and Series B ESOP Convertible Class A Preferred Stock of the Company, payable on or after August 15, 2014, to Common Stock shareholders of record at the close of business on July 18, 2014, and to Series A and Series B Preferred Stock shareholders of record at the start of business on July 18, 2014.
Ruling the Indian Market
Regional players had over 15% share in the toothpaste market some 10 years ago. Multinationals like Procter & Gamble are largely gulping the market share. Big players in the oral-care space also wooed consumers with value-added products that offer extra benefits at a small premium to the basic white toothpaste that most regional players sell. The successful entry of P&G to the market since 2011 also affected small regional players. P&G's mass brand Oral B has garnered a market share of 30 basis points in the first six months of its launch. The Indian oral-care market is currently valued at 7,000 crores which definitely goes in favor of this company. As more and more regional players are losing out to these multinational companies, P&G surely has potential in this part of the globe.
What the Future Would Be Like
The company is planning to spend more on advertising, and its growing emphasis on digital media reflects both the shift in where consumers are focused and a desire to increase the effectiveness of the money it spends. Company executives say digital media in many cases is proving to be a faster and cheaper way for P&G's brands to reach consumers, and feedback is also faster. The CEO, who previously ran the company from 2000 to 2009, said P&G will sharpen its focus on product innovations, cut costs and execute well with core brands and its most important markets. He said P&G also has a plan to revive its Pantene and Olay beauty brands, which have been losing share to rivals in recent years.
Procter & Gamble Co. is aiming for a sales boost of more than $150 million from advertising and promotional campaigns around the Sochi 2014 Olympics. The company is planning on activating in the markets where the Olympic Winter Games are most relevant, such as Russia, the U.S., Canada, Germany and Poland.
The maker of Pampers diapers and Tide detergent is considering a merger of its Western European unit with its Eastern and Central Europe business, while its Indian business will combine with the Middle East and Africa to form another group. P&G chief executive A.G. Lafley said the consumer products giant's digital spending on things like online ads and social media ranges from 25% to 35% of its marketing budget and is currently near the top of that range in the U.S., its biggest market.
In a highly competitive Consumer Staple Industry, continuous innovation is the key to success. In order to remain successful among the key peers in the consumer sector, PG has been continuously bringing in new and diverse products in almost all of its categories. Moreover; the recent launch of PG's innovative product "Gain Flings" has gone extremely well, reaching nearly a 3% value share in the U.S. laundry category in just two months. The company's recent tide drycleaners store initiative to serve the growing demand for a product that makes cleaning efficient and effortless is another testament to the long-term success of PG in laundry care.
The product innovation measures have allowed PG to maintain its leading manufacturer share in a highly competitive U.S. Laundry Care Industry. By the end of 2013, the total sale of PG's products accounted for a 55% share of laundry care, up from 54% in 2012; this 1% jump in PG's value share was the highest by any company in 2013.
PG should benefit from innovation and growth in new markets and categories, along with increases in global market share. The company's goals are to return to 8% to 10% EPS growth and free up funds for reinvestment. Going forward currency exchange should be more favorable and the company should reap the benefits from productivity improvements.
The company is known for its impressive product development capabilities and marketing prowess. As an example, PG recently opened a new Tide Dry Cleaners store in Glen Ellyn, IL. Tide Dry Cleaners stores provide drive-thru concierge services, along with 24-hour pick-up and drop-off. The store uses GreenEarth technology and Tide Fabric care to offer cleaning services for various garments and textiles.
The company is investing in projects which will produce greater returns to its investors. Combined with its earnings growth and share buyback activity, P&G will provide valued returns to its shareholders. P&G serves approximately 4.8 billion people around the world with its brands. The company has one of the strongest portfolios of trusted, quality brands. P&G has always commanded brand loyalty among consumers. One of the most important ways it fuels investments in innovation and brand building is through cost savings and productivity improvements.
It is a solid company overall with improving technicals and is one of the most respected brands globally. It may be a good bargain moving forward, and with its worldwide brand recognition and presence, it is bound to be around well into the future.