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Procter & Gamble (PG). Presented by: Zach Scott November 11, 2010. Company Overview. Founded1837, Procter & Gamble has become the world's largest consumer product manufacturer Tide laundry detergent Charmin toilet paper Pantene shampoo Cover Girl cosmetics Iams pet food
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Procter & Gamble (PG) Presented by: Zach Scott November 11, 2010
Company Overview • Founded1837, Procter & Gamble has become the world's largest consumer product manufacturer • Tide laundry detergent • Charmin toilet paper • Pantene shampoo • Cover Girl cosmetics • Iams pet food • Household products Stalwart • Had trouble responding to the economic downturn, However recently implemented plans to reinvigorate top-line and earnings growth • Unprecedented skills: • consumer understanding, marketing, and brand-building
Company Overview (Continued) • P&G's brands often hold top market share positions • retains a strong bargaining position with retailers • The company achieves economies of scale in distribution • premium household product offerings cross consumer categories • from toilet paper and dog food to shampoo and skin cream • Poor 2009 • higher prices P&G pushed through on its products to offset input cost inflation of $2 billion and negative foreign currency exchange of $4 billion • uncompetitive pricing on store shelves in the midst of the economic downturn. • Sales volume declined, and P&G lost market share in some categories • CEO Robert McDonald is instituting cost discipline • business services, purchasing, and logistics • Savings from these initiatives, along with investments in new product development, are expected to offset any potential gross margin erosion that could result from a more value-oriented positioning of the firm's brands
Key Financials • 52 week Range= 39.37-65.00 • Market Cap= $182.9 Billion • Projected Div Yield= 3% • Recent Dividends • 10/20/10:$0.4818 • 07/21/10:$0.4818 • 04/28/10:$0.4818 • 01/20/10:$0.4400 • Dividend profit= $38.54 • P/E= 14.7 • Profit Margin= 15.79% • ROA= 7.39% • ROE= 16.98% • Purchase Price= $61.83 • Recent Price= $64.57 • Shares Held= 20 • $ Gain/Loss= $54.8 • Current Value= $1291.4 • FV Estimate= $77.00 • 1yr Target= $70.97 • Stock Price was at $60.18 to begin the semester
Recommendations • I Recommend we hold our PG shares • This is a Value stock that will see slow growth over the next few years • With all of the company adjustments and cutback that PG is instituting in the rehabilitation from the economic downturn I project slow growth and could see the stock reach its 1yr projected target from yahoo.finance of $70 and over the next 5 years I believe they could come close to the Fair Value estimate from morningstar.com of $77 • We will see good dividend return on our shares • Growth Estimates • Past 5 years= 9.02% • Next 5 years= 8.78%