NYSE:PG
$61.80
(2/9 1:27PM)
+1.3%
| Open | $61.38 |
Mkt Cap | $177.2 Billion |
| High | $61.91 |
52Wk High | $63.48 |
| Low | $61.01 |
52Wk Low | $43.93 |
| Volume | 6.4 Million |
Avg Vol 10D | 15.3 Million |
PG Stock Evaluation
As of the time of this report, there has been relatively little movement in price for PG over the last week. Furthermore, there has been no revision to earnings expectations or guidance. Given these factors as well as those contained in our complete analysis, we do not have enough of a catalyst to necessitate a rating change. For more detail please read the rest of our analysis of PG's valuation.
Recommendation Summary
At Ockham Research, we are always interested in understanding a company from a valuation standpoint, but even the most ardent value investor understands that there is more to the picture than simply valuation. So, we also apply a volatility studies for both the index and individual sectors. We utilize these tools in order to get a more complete picture of the investing environment. So, while most of our report highlights current valuation versus historical norms as well as peer analysis, there is still more going on behind the scenes.
In general, when sectors, in this case the Consumer Services sector, have outperformed the market we tend to be a bit more hesitant to recommend stocks in that sector. However, even though the stocks in Consumer Services have appreciated 49.2% in the last twelve months, we believe that PG is not quite due for an upgrade. Please see the full report of underlying research for more of our rationale of keeping a rating of Fairly Valued for at least another week.
Beginning with price changes, since our last report dated 01/30/2010 the price of PG has decreased by 0.41%, but this does not greatly change our outlook on PG.
Also, there have been no meaningful adjustments in earnings expectations to report in the last week.
PG Revenue
Cash earnings is the most important factor in our analysis, but it goes without saying that if a company cannot produce sales then there is no ability to generate cash flow. By that logic we look very closely at revenue numbers as our second most important factor in valuing a company's stock. We have established reasonable Price to Sales per share ranges based on historical data of the last 10 years. For, PG the high and low end of the Price to Sales per share ratios are 2.98x and 2.28x respectively.
Notice that PG's current Price to Sales per share ratio is 2.64x, which is somewhat above its historical average. As such, the current Price to Sales ratio suggests a neutral share price forecast. In order for us to become more positive about PG we would need to see a drop in the Price to Sales ratio of 0% given current sales per share levels in order to return to its historical weighted average.
PG Cash Earnings
Cash Earnings is always one of the most important factors to review for a company and, more importantly, an investment in a stock. PG is significantly below its historical average multiple of cash earnings as calculated by Ockham. Similar to our analysis of sales per share, Ockham looks at the last 10 years of cash earnings levels for PG to identify where the current high and low price levels have been historically in relation to profit per share. Again, we utilize a weighted average methodology which relies more heavily on recent years of data. This weighted average framework provides us with an average high Price to Cash Earnings ratio per share of 17.33 and a 13.36 low over the same period.
Now that PG’s current price is $61.30 and its Price to Cash Earnings ratio is 11.03, we are very positive on its outlook from the cash earnings perspective. In fact, PG is now trading a full 29% below its average historical Price to Cash Earnings ratio at these profit per share levels. When our clients ask us why PG has great long term potential, the Cash Earnings levels to current stock is one of our primary reasons. But naturally, now we need for the overall market to recognize this disparity.
PG Dividends
A strong dividend payment history is looked upon as a favorable characteristic on a company’s future and potentially can receive a positive Ockham rating. That being said, we don't require dividend payments for company's whose management has elected to forgo them entirely.
When reviewing dividend yields for PG, we compare the historic high and low levels over the past, which is similar to our evaluation of Sales and Cash Earnings per share. Paying a dividend is not necessary for any company, but changes in dividend often can lend clues as to the health of the business. A rising dividend is a strong sign for an established company, as it reflects management's confidence in the company. PG’s estimated annual dividend is $1.76 resulting in a current dividend yield of 2.87%. The highest dividend yield from PG over recent history was 4.01% while the lowest dividend yield was 1.59%. Management at PG has encouraged us with a current dividend yield of 2.50% above the historical median.
Did You See PG's CEO McDonald on The Call?
Ockham is always interested to know what the Chief Executive is doing for their company, and we noticed a mention of PG's CEO on The Call.
The Procter & Gamble Company receives our Fairly Valued rating in our latest report because the current price does not seem out of line with the fundamentals. Crowd sentiment is leaning to the bearish side, according to the robust data set collected by the Motley Fool CAPS survey. Ranking all stocks in terms of news coverage offers some interesting data. In the case of PG, it is getting significantly more attention in recent news coverage than we are used to seeing.
“… PROCTER & GAMBLE's ceo bob mcdonald says it is his biggest concern now. We asked should there be a tax on foreign products. …”
Mad Money Has News on PG
The Procter & Gamble Company is one of the thousands of companies that Ockham has news analytics on, and it was recently discussed on Mad Money.
We noticed recently that in comparison to all other stocks we analyze in the news; PG has received less coverage from the financial media in business television and blogs. The Procter & Gamble Company receives our Fairly Valued rating in our latest report because the current price does not seem out of line with the fundamentals. Crowd sentiment is leaning to the bearish side, according to the robust data set collected by the Motley Fool CAPS survey.
“… PROCTER & GAMBLE, that was an unbelievable quarter and the stocks should be much higher. Exxon mobil is in the cross hairs of the government. …”
Did You See PG's CEO McDonald on WSJ Marketbeat?
Staying in touch with the latest management news is one way we are keeping our clients informed. Notice, RazorWire has a news capture related to PG's CEO.
As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, PG has been less covered in the news compared to the rest of our universe of stocks. After factoring in the current fundamentals versus their historically normal ranges, we have established a Fairly Valued stance on PG. The Motley Fool CAPS data suggests that investors believe The Procter & Gamble Company will beat the market in the foreseeable future.
“… Among the other 2009 Dow laggards that are outperforming in 2010: Kraft, McDonald’s and PROCTER & GAMBLE. All four reported earnings above analysts’ estimates for the latest ... …”
Fox Business Has News on PG
The Procter & Gamble Company is one of the thousands of companies that Ockham has news analytics on, and it was recently discussed on Fox Business.
As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, PG has been less covered in the news compared to the rest of our universe of stocks. After factoring in the current fundamentals versus their historically normal ranges, we have established a Fairly Valued stance on PG. Our valuation of PG has become less favorable recently, and we have seen it necessary to downgrade the stock. The Motley Fool CAPS data suggests that investors believe The Procter & Gamble Company will beat the market in the foreseeable future.
“… PROCTER & GAMBLE up 22 percent for the same quarter last year, three m. Beats the street and raised their outlook for the year but microsoft down with three m. …”
The Procter & Gamble Company News Appeared on Squawk Box
The latest news from Squawk Box on PG is available through Ockham's news analytics platform RazorWire.
Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey. In comparison to the other stocks that we follow, The Procter & Gamble Company has seen more discussion in relation to its normal ranking among the group. Be aware that the news sources we track are focusing on this stock more often these days. The Ockham valuation currently has a Fairly Valued stance on PG because it trades within the price range that we would expect given current market conditions and fundamentals. We have recently (Saturday, January 16, 2010) downgraded this stock due to deteriorating fundamentals.
“… yeah, PROCTER & GAMBLE had some problem with -- a little bit, anyway, with the -- you know, the private label competition. J&j has a huge consumer products, too. …”
Earnings Per Share at PG Were on the Docket at Closing Bell
PG's earnings per share was discussed on Closing Bell which means there is something significant going on. Profits are the metric we pay the most attention to in our methodology.
Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey. We have recently (Saturday, January 16, 2010) downgraded this stock due to deteriorating fundamentals. The Ockham valuation currently has a Fairly Valued stance on PG because it trades within the price range that we would expect given current market conditions and fundamentals. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, The Procter & Gamble Company has actually sunk a bit in comparison to the others.
“… PROCTER & GAMBLE and the biggest of them all, in terms of sort of market moving potential there, there might be microsoft. …”
Heard on Countdown to the Closing Bell: CEO of PG Discussed
Ockham is always interested to know what the Chief Executive is doing for their company, and we noticed a mention of PG's CEO on Countdown to the Closing Bell.
The Procter & Gamble Company receives our Fairly Valued rating in our latest report because the current price does not seem out of line with the fundamentals. Ranking all stocks in terms of news coverage offers some interesting data. In the case of PG, it is getting significantly more attention in recent news coverage than we are used to seeing. Due to deterioration in our valuation, we downgraded PG as of Saturday, January 16, 2010. Crowd sentiment is leaning to the bearish side, according to the robust data set collected by the Motley Fool CAPS survey.
“… General electric, mcdonald's, PROCTER & GAMBLE, coca-cola for example and walmart the other one. Look at the consumer finance stocks talking about the banks remaining under the ... …”
The Latest News for PG Was Just on Closing Bell
As always, the latest news on PG is available to Ockham clients through RazorWire, and it was mentioned recently on Closing Bell.
Based on our methodology, The Procter & Gamble Company should hold some appeal to value investors as we view it as Undervalued. Crowd sentiment is leaning to the bearish side, according to the robust data set collected by the Motley Fool CAPS survey. Please have a look at our report for our reasons to upgrade the stock to Undervalued on our report dated Saturday, January 09, 2010. We noticed recently that in comparison to all other stocks we analyze in the news; PG has received less coverage from the financial media in business television and blogs.
“… Well, as we move on to that one, pfs web just got a big deal with PROCTER & GAMBLE today. PROCTER & GAMBLE floating a plan to sell a lot of its products online on its own ... …”
PG Profits on the Mind of Squawk On The Street
Earnings or profits are the most key fundamental factor that an investor to be aware of for any stock. We noticed Squawk On The Street discussed earnings on PG.
It is also notable that we have recently upgraded this stock on Saturday, January 09, 2010 because PG is more attractive in many of the valuation metrics we evaluate. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, The Procter & Gamble Company has actually sunk a bit in comparison to the others. Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey. At present, Ockham has a valuation stance of Undervalued on PG, as we could see significant price appreciation based on current fundamentals like cash earnings and revenue.
“… PROCTER & GAMBLE only sells at 16 times earnings. The flip side, a company like bank america which is up from a $3 low so it's up 500%, we still. …”
Did You See PG's CEO McDonald on Squawk Box?
Staying in touch with the latest management news is one way we are keeping our clients informed. Notice, RazorWire has a news capture related to PG's CEO.
The Motley Fool CAPS data suggests that investors believe The Procter & Gamble Company will beat the market in the foreseeable future. We consider PG as Undervalued at the current price of $61.44. According to our methodology, this stock has appreciation potential based on current fundamentals which only improves if earnings or revenue surprise. As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, PG has been less covered in the news compared to the rest of our universe of stocks. The improving valuation of The Procter & Gamble Company has prompted us to upgrade this stock as of Saturday, January 09, 2010.
“… And so we see a shift towards those companies, like a disney, like a PROCTER & GAMBLE, like a johnson and johnson, mcdonald's, ibm, walmart. …”