Did you wipe up a spill with Bounty paper towels this morning? Or throw a Tide pod in the washer? If so, you already own products manufactured by Procter & Gamble Co. (NYSE: PG). This well-known consumer goods company specializes in areas as diverse as beauty care products to grooming products to home care essentials. Founded in 1837 by William Procter and James Gamble, the company’s headquarters are in Cincinnati, Ohio.
Procter & Gamble has various leading brands such as Head & Shoulders, Febreeze, Pantene and many more under its banner. David S. Taylor's takeover as CEO in 2015 has resulted in the firm's share price surging to record highs. How can you clean up on the play?
Procter & Gamble Stock History & Value
Procter & Gamble became a publicly-traded company in 1890.
The company has been relatively unaffected by the pandemic as it made a limited impact on the products it sells. However, Procter & Gamble’s share price was not immune to the initial panic. In February and March 2020, its stock price dropped to a low of $94.34. Regardless, substantial gains during the following quarters and a continued rise in 2021 have erased the memory of those losses.
In all, 2021 has been a good year for the company. After an initial dip, its shares have rallied, hitting new all-time highs. The last three months have also been kind to the stock, adding 7.86% to its value. Furthermore, in the latter weeks, the stock has reached record highs of $155.80.
As year-end approaches, P&G is forecast to earn $1.66 per share and record revenue of $20.38 billion for the quarter. It is currently 1.0% above its average consensus analyst price target of $150.43.
Procter & Gamble: What Analysts Are Saying
According to a report from the financial analyst ranking website Tipranks, Wall Street has taken a bullish view on the stock, with four analysts polled, two of whom assigned buy ratings and two setting hold ratings.
Deutsche Bank Bear Case
Limited amount of current bearish commentary on Procter & Gamble exists. However, going back just over a month, P&G’s price target was lowered at Deutsche Bank by analyst Steve Powers from $163 to $160. Powers explained that he felt the company’s fiscal Q1 earnings fell somewhat short because of higher than expected gross margin pressures that are likely to persist. However, despite cutting his price target, Powers kept a buy rating on the stock.
Jefferies Bull Case
Following impressive first-quarter earnings results, Jefferies analyst Kevin Grundy reiterated a buy rating on P&G and increased the price target to $163 from $162. Grundy said, “U.S. consumption trends accelerated in Q1 and should help drive modest upside in the quarter.”
Despite keeping the buy rating, the analyst commented on the potential of the cost/supply chain environment causing material headwinds for FY22.
How to Buy Procter & Gamble (NYSE: PG) Stock
P&G stock can be purchased directly through its P&G Direct Stock Purchase Plan. However, you can also buy PG shares through a broker. If you do not have a brokerage account, here are the guidelines to follow to set one up.
Step 1: Pick a brokerage.
A broker mediates between you and the stock exchange. You place an order via the broker to buy a stock. The broker carries out those instructions. For example, if you decide to purchase shares in Procter & Gamble, you tell your broker via an app or online program to buy the number of shares you request at the price you set, and it carries out those instructions.
In return, the broker charges you a fee for its services. The broker fee varies depending on the broker you are with, and these days the service may be free. Therefore, it is essential to look into costs and other aspects of the broker’s services before setting up an account.
Step 2: Decide how many shares you want.
Once you have selected a broker, fund your account and determine how many shares to buy. Take into account the level of risk you want to take and the percentage of your account attributed to Procter & Gamble shares.
Starting with a small investment and consistently investing more over time is a strategy used by investors. However, before buying an initial amount of shares, consider how you will enter the market or execute the position.
Step 3: Choose your order type.
This stage requires you to choose how your position is executed. Different order types exist, but the main two are market and limit orders.
Market orders mean you buy the shares at the current market price. Therefore, using market orders results in an increased chance your order will be filled at the going price, which may not be the best price of the day.
Limit orders mean that the price you pay for the stock is dictated by you. You can determine what price you buy the shares at, but you face the risk that the order won’t be filled if the price doesn’t hit your predetermined level.
Step 4: Execute your trade.
After you have completed all the required steps to acquire the shares, click buy or submit. Once completed, you can monitor the stock and your other positions by navigating to the correct tab on your brokerage platform.
Where to Buy Procter & Gamble
You can buy PG shares via its Direct Stock Purchase Plan or through a broker. Finding a broker you feel comfortable with can sometimes be difficult, especially for new, less experienced investors. Here is a list of Benzinga’s top brokers that offer Procter & Gamble shares.
- Best For:Active and Global TradersSecurely through Interactive Brokers’ website
- Best For:Traders of All Levelssecurely through Moomoo's website
- Best For:Mobile Userssecurely through Plus500's website
- Best For:Momentum traderssecurely through Centerpoint Securities's website
- Best For:Intermediate Traders and Investorssecurely through Webull's app
Pros and Cons of Procter & Gamble
- Diversified products: Procter & Gamble has various products to offer — all being household necessities. The consumer goods powerhouse holds strong positions in beauty, grooming, healthcare and baby care.
- Dividend payments: P&G has been paying a dividend since 1891, and it has increased every year since 1956. Over the past 5 years, the quarterly payout has increased 38%.
- Stability: The company has been around since 1890 and has a stable cash flow. In addition, its share price has experienced strong gains during the pandemic.
- Competition: The company has faced increased heat from competition. Companies such as Colgate-Palmolive Co. ( NYSE: CL), Unilever (NYSE: UL), Kimberley Clark Corp. (NYSE: KMB) and Clorox Co. (NYSE: CLX) compete for market share.
- Higher cost: An increase in prices from global supply chain constraints are expected to bite into the company’s earnings.
- Environment: P&G has recently stated that obtaining recycled plastic to reach its 2030 environmental goals will be difficult due to supply chain shortages. Meanwhile, last year it was reported that institutional shareholders defied the company to support a call for it to do more to protect forests.
Is Procter & Gamble a Buy, Sell or Hold?
The growth for P&G in 2021 has been steady, although in recent weeks it has experienced a strong rally to new highs. While that hasn’t been the norm for its shares historically, the increase in its dividend payout each year makes it an attractive investment for people looking for consistent returns and a company with solid fundamentals. Furthermore, analyst ratings and the company’s recent earnings beat suggest it is strong through an unstable economy and further supports analysts’ buy ratings.
Frequently Asked Questions
What exactly does Procter & Gamble do?
Procter & Gamble is a consumer goods company with various brands under its banner that are sold globally. It currently operates across five markets, including beauty; grooming; health care; fabric and home care; and baby, feminine and family care.
Is Procter & Gamble a good dividend stock?
Procter & Gamble pays a quarterly dividend of $0.87 per share, boasting a dividend yield of 2.41%. It has paid a dividend for 131 years and raised its dividend 65 times.
About Sam Boughedda, Stock Market Analyst
He is an expert in the following spaces: stock market news writing, analysis, and research.