Procter & Gamble (NYSE:PG) is one of the largest and among the fastest-growing consumer goods companies across the world with its presence felt in more than 180 countries. The company deals in consumer-packaged goods. Across the world, PG serves around 4.8 billion people. The company operates in 5 segments – Health Care, Beauty, Family Care, Grooming and Home Care.
Performance of late
In fiscal 2014, the company returned $12.9 billion in cash to shareholders. This was done through share repurchases and dividend payments. Capex was $3.8 billion. Revenue is up by 3% for its fiscal 2014. It has a market capitalization of $ 215 billion.
Organic sales and volume increased by 7% and 2%, respectively, for the Grooming segment. In the Health Care segment, global market share increased by 0.3%. In the Homecare segment, organic sales increased 1%. Organic sales in the Family Care segment increased by 3%.
In 2014, the company repurchased about $6 billion in shares. Being a leader in the personal products industry, PG is known for its solid dividend payouts. The company has been paying dividends since 1944. It has a track record of distributing dividends for 58 consecutive years. Over the past decade, annual dividends have increased by 10.80%. Currently it has a dividend yield of 3.17% and a payout ratio of 60%. The stock is desirable at forward earnings of $17.70. Shares outstanding have also lowered.
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- PG 15-Year Financial Data
- The intrinsic value of PG
- Peter Lynch Chart of PG
In a bid to become more efficient, PG has announced that it would shed up to 90 brands. According to CEO A.G. Lafley, the company wants to concentrate the more revenue productive units in its portfolio. The plan of this divestment was made so that the company can focus on its core products. PG is planning to revive its Pantene and Olay beauty products which are on a losing streak. This marks a dynamic change in strategy.
Customers these days have so many options to choose from. Increasing competition and complexity means a company has to put in more resources to each of its products. In such a scenario it is quite wise of PG to drop its unprofitable or less profitable lines. The company is keen to produce products that have increased synergy of operations.
Tapping the Indian market
Players like PG are increasingly getting a share in the Indian market. The Indian oral-care market is valued at a whopping 7,000 crores and holds a very bright future for multinational consumer goods companies like PG. For the quarter ending on June 30, PG India registered a net profit of Rs 89.9 crores. There is a jump of over 78%.
The Indian business is all set to combine with Africa and the Middle East to form another group. The entry of this company into the Indian market affected the regional players. PG is going into Indian schools (with government approval) to preach to girls the benefits of sanitary towels.
PG is one of the world's most thoroughly integrated multinationals. Over the past years, the Ohio-based consumer goods company has returned good proceeds to shareholders. Globally, PG is one of the most reputed brands. The best thing about the company is that it has a vast array of products to offer at different affordable prices. The company is currently focusing on efficiency, and this is going to fuel its future growth. It is constantly concentrating on the emerging markets, where it has tremendous potential in store.
PG is continuously delivering robust double-digit growth in a competitive market environment behind superior products, strong initiatives and product portfolio strength. PG is presently cutting costs and spending on product innovations. The company has a good pricing power since it has some of the most reputed names under its clout. With good financials and constant innovating spree, the company is bound to grow further and create shareholder returns.