In-Depth Analysis: Procter & Gamble Versus Competitors In Household Products Industry

In today's fast-paced and competitive business landscape, it is essential for investors and industry enthusiasts to thoroughly analyze companies before making investment decisions. In this article, we will conduct a comprehensive industry comparison, evaluating Procter & Gamble PG against its key competitors in the Household Products industry. By examining key financial metrics, market position, and growth prospects, we aim to provide valuable insights for investors and shed light on company's performance within the industry.

Procter & Gamble Background

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 26.39 7.74 4.75 7.6% $5.54 $10.34 0.63%
Colgate-Palmolive Co 31.98 119.56 3.78 239.33% $0.92 $2.95 6.93%
Kimberly-Clark Corp 24.96 43.88 2.26 63.82% $0.87 $1.74 0.12%
Church & Dwight Co Inc 34.99 6.75 4.50 3.89% $0.28 $0.68 6.41%
Clorox Co 231.70 341.81 2.49 1162.5% $0.22 $0.87 16.04%
Reynolds Consumer Products Inc 20.16 3.03 1.60 7.07% $0.26 $0.31 -7.54%
WD-40 Co 45.05 14.17 5.47 7.16% $0.02 $0.07 6.85%
Central Garden & Pet Co 17.95 1.75 0.73 0.03% $0.04 $0.18 1.09%
Energizer Holdings Inc 22.42 12.17 0.72 1.0% $0.08 $0.27 -6.34%
Oil-Dri Corp of America 11.80 2.62 1.59 6.12% $0.02 $0.03 3.93%
Average 49.0 60.64 2.57 165.66% $0.3 $0.79 3.05%

Through a meticulous analysis of Procter & Gamble, we can observe the following trends:

  • A Price to Earnings ratio of 26.39 significantly below the industry average by 0.54x suggests undervaluation. This can make the stock appealing for those seeking growth.

  • The current Price to Book ratio of 7.74, which is 0.13x the industry average, is substantially lower than the industry average, indicating potential undervaluation.

  • With a relatively high Price to Sales ratio of 4.75, which is 1.85x the industry average, the stock might be considered overvalued based on sales performance.

  • With a Return on Equity (ROE) of 7.6% that is 158.06% below the industry average, it appears that the company exhibits potential inefficiency in utilizing equity to generate profits.

  • The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $5.54 Billion is 18.47x above the industry average, highlighting stronger profitability and robust cash flow generation.

  • Compared to its industry, the company has higher gross profit of $10.34 Billion, which indicates 13.09x above the industry average, indicating stronger profitability and higher earnings from its core operations.

  • The company's revenue growth of 0.63% is significantly lower compared to the industry average of 3.05%. This indicates a potential fall in the company's sales performance.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio gauges the extent to which a company has financed its operations through debt relative to equity.

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.

When comparing Procter & Gamble with its top 4 peers based on the Debt-to-Equity ratio, the following insights can be observed:

  • When comparing the debt-to-equity ratio, Procter & Gamble is in a stronger financial position compared to its top 4 peers.

  • The company has a lower level of debt relative to its equity, indicating a more favorable balance between the two with a lower debt-to-equity ratio of 0.65.

Key Takeaways

For Procter & Gamble, the PE and PB ratios suggest the stock is undervalued compared to peers, indicating potential for growth. However, the high PS ratio implies the stock may be overvalued based on revenue. In terms of ROE, EBITDA, and gross profit, Procter & Gamble shows strong performance, indicating efficient operations and profitability. The low revenue growth suggests slower expansion compared to industry peers in the Household Products sector.

This article was generated by Benzinga's automated content engine and reviewed by an editor.

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