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Thread: PG - Procter and Gamble

  1. Default PG - Procter and Gamble

    ...finally doing something, had a nice report and I might finally break even with this thing soon when i bought it a while ago at 59, but ill keep holding from there

  2. Default

    this thing is going a lot higher.
    they beat by a penny and it gets taken that far up.
    This also happens to be a quarter in which they are integrating Gillette.
    Once that thing is integrated, that thing is gonna be smokin'.

  3. Default

    Anyone buying now that the buyback was increased from $6 billion to $30 billion?

    I'm a little disappointed this one hasn't moved much since hitting the low to mid 60s but it is one stock that you can buy and hold forever.

    I'd be interested in what managements target price is for releasing capital to buy shares. Will they buy above or below $60/share?

  4. Default

    Got to love the fact the yield on this one is now over 3%. A true international juggernaut with a half-dozen billion-dollar brands that is currently yielding as much as a high-yield savings account. Anyone claiming the dividend is not safe is blowing smoke.

    On top of this P&G is expanding into the $20 billion US retail carwash business in their first foray into franchising. As the article below states, the carwash market is fragmented with the largest chain being comprised of only 100 stores out of a total market of 100,000. With P&G's brand power, and with such massive scope and scale it would not surprise me to see them capture 5% of the market and add another billion-dollar brand to their portfolio.

  5. Default

    Conclusion: In general PG is a good company. It has high earnings and dividend quality. It is a big company with strong brands.
    But the company is priced well. Also when you for example check the performance of last years, you can see it didnt declined as much as the market. In case of lower valuation, PG would definitely a stock I would consider.
    For the long term I dont think PG will be an outperformer. In the current market there are better possibilities.

  6. Default

    That is a fair assessment. However, using such a strict approach also restricts one from considering classic defensive name such as HJ Heinz [HNZ], Campbells [CPB], and Kellog [K] which all have negative tangible book value. Even uber-yielder Altria [MO] barely qualifies for consideration under this approach as it struggles to eek out a positive tangible book value.

    In an environment such as this high yielding, secular blue chips are a safe haven not suitable for only the most ardent of value investors. Based on the Benjamin Graham quote following your post I would say you qualify as such. Although Graham's most famous student has a hefty stake in P&G.

  7. Default

    After the positive messages above I have a little more pessimistic view on PG.

    Let's start to say that i'm not completely negative on the stock. But I think there are better opportunities in the market. With the current conditions PG can be a stable company (it is big and has strong brands). But looking to the future, and considering a longterm hold in the company, I dont think PG is the best opportunity.

    My main reason is the valuation. PG is according to me relatively well priced in this market. A p/e of 14 I would call high in these times. I get more convinced in my thougths when looking at the book values. The normal p/b is already 2.5. When studying the balance sheet you should notice the high amount of goodwill and intangibles(almost 100billion), causing a negative tangible book value.
    Then dividends. I am a believer in high and stable dividend payments. Looking at dividend history PG has a very good history with stable increasing payments over time. The current yield of 3% is indeed very nice. The same is true for earnings quality (also stable and increasing over time). However prospects for 2010 show a very small decline (which is actually quite okay compared to other companies).
    One last concern is financial strength. Some ratios show a poor financial strenght. From the other side PG is a big and stable company. I would recommend further analysis into this.

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