The Procter & Gamble Company (PG) | Investment Case

1. Company Snapshot

1.a. Company Description

The Procter & Gamble Company provides branded consumer packaged goods worldwide.It operates through five segments: Beauty; Grooming; Health Care; Fabric & Home Care; and Baby, Feminine & Family Care.The Beauty segment offers conditioners, shampoos, styling aids, and treatments under the Head & Shoulders, Herbal Essences, Pantene, and Rejoice brands; and antiperspirants and deodorants, personal cleansing, and skin care products under the Olay, Old Spice, Safeguard, Secret, and SK-II brands.

The Grooming segment provides shave care products and appliances under the Braun, Gillette, and Venus brand names.The Health Care segment offers toothbrushes, toothpastes, and other oral care products under the Crest and Oral-B brand names; and gastrointestinal, rapid diagnostics, respiratory, vitamins/minerals/supplements, pain relief, and other personal health care products under the Metamucil, Neurobion, Pepto-Bismol, and Vicks brands.The Fabric & Home Care segment provides fabric enhancers, laundry additives, and laundry detergents under the Ariel, Downy, Gain, and Tide brands; and air care, dish care, P&G professional, and surface care products under the Cascade, Dawn, Fairy, Febreze, Mr. Clean, and Swiffer brands.

The Baby, Feminine & Family Care segment offers baby wipes, taped diapers, and pants under the Luvs and Pampers brands; adult incontinence and feminine care products under the Always, Always Discreet, and Tampax brands; and paper towels, tissues, and toilet papers under the Bounty, Charmin, and Puffs brands.The company sells its products primarily through mass merchandisers, e-commerce, grocery stores, membership club stores, drug stores, department stores, distributors, wholesalers, specialty beauty stores, high-frequency stores, pharmacies, electronics stores, and professional channels, as well as directly to consumers.The Procter & Gamble Company was founded in 1837 and is headquartered in Cincinnati, Ohio.

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1.b. Last Insights on PG

Procter & Gamble faces short-term headwinds, including soft demand, inflation, and fierce competition, which have pressured growth and margins. Institutional investors, such as Beacon Pointe Advisors and Avantax Advisory Services, have decreased their stakes in the company. Additionally, 17 Capital Partners trimmed its stake by 9.8%. However, Baltimore Washington Financial Advisors increased its position by 12.7%. The company's recent growth moderation and minor market share losses are viewed as normal cyclical behavior. P&G's valuation is considered fair, with a 2.8% dividend yield above its 5- and 10-year averages.

1.c. Company Highlights

Last Price	155.85
Change Percentage	1.74%
Open	152.59
Previous Close	153.19
Market Cap ( Millions)	364180
Volume	2444515
Year High	179.99
Year Low	137.62
M A 50	145.26
M A 200	153.93

FCF Yield	4.08%
Dividend Yield	2.71%
ROE	31.23%
Debt / Equity	68.72%
Net Debt / EBIDTA	109.30%
Price To Book	7.09
Price Earnings Ratio	22.94
Price To FCF	24.53
Price To sales	4.27
EV / EBITDA	16.51

2. P&G's Q2 2026 Earnings: A Mixed Bag

Procter & Gamble's (P&G) second-quarter 2026 results were mixed, with core earnings per share (EPS) coming in at $1.88, in line with the prior year, and slightly above analyst estimates of $1.86. Organic sales were flat compared to the prior year, with volume down 1%, pricing up 1%, and mix flat. The company's margin productivity savings were 70 basis points, with 20 basis points reinvested. Revenue was in line with expectations, and the company's guidance for fiscal 2026 remains unchanged, with organic sales growth expected to be in line to plus 4%.

Publication Date: Jan -23

                                    📋 Highlights
                                    Organic Sales Stability::
                                                Flat organic sales YoY with volume down 1% offset by 1% pricing growth, driven by seven of 10 categories holding/growing, including Hair Care (+low to mid-single digits) and Home Care (+mid-single digits).
Regional Growth Disparities::
                                                Latin America surged 8% YoY, while North America declined 2% and Europe grew 1%, highlighting emerging markets as key growth drivers amid mixed global performance.
Shareholder Returns::
                                                $4.8B returned to shareholders in Q2 (dividends: $2.5B, buybacks: $2.3B), with full-year 2026 guidance for $15B in returns ($10B dividends, $5B buybacks).
EPS Guidance::
                                                Core EPS of $1.88 in line with prior year, with 2026 guidance of $6.83–$7.09/share (+4% growth range), reflecting margin expansion from productivity and top-line growth.
Strategic Reinvestment Focus::
                                                70 bps margin productivity savings in Q2, with 20 bps reinvested into innovation and media, prioritizing US e-commerce (60–80% of category growth via Amazon) and emerging markets (9% growth in Brazil, double-digit in Mexico).

                                

Segment Performance

P&G's segment performance was varied, with seven of 10 product categories holding or growing organic sales. Hair Care, Skin and personal care, and Home Care saw low to mid-single-digit growth. However, Baby Care and Family Care were down low single digits and 10%, respectively. The Grooming segment saw flat organic sales, with volumes declining and margins contracting. The company expects modest acceleration in grooming in the second half, driven by the US and innovation.

Regional Growth

Geographically, organic sales growth was mixed, with North America down 2%, Europe up 1%, Greater China up 3%, and Latin America up 8%. P&G is well-positioned to play to future growth in emerging markets, such as Latin America, where the company is seeing 9% growth in Brazil and double-digit growth in Mexico.

Growth Initiatives

P&G is focused on driving growth through innovation, productivity, and constructive disruption. The company is leveraging data, technology, and capabilities to build stronger brands, deepen consumer connections, and integrate with retail partners. P&G expects to accelerate growth in the second half of the year, driven by a strong business outside the US and improving underlying results in the US.

Valuation

Using the current valuation metrics, P&G's P/E Ratio is 21.79, P/B Ratio is 6.86, and EV/EBITDA is 15.12. The Dividend Yield is 2.79%, and the Free Cash Flow Yield is 4.27%. With analysts estimating next year's revenue growth at 2.8%, the current valuation appears reasonable. However, investors should continue to monitor the company's progress in driving growth and improving profitability.

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