Despite Steady Gains, Procter & Gamble Stock Has Underperformed The S&P 500 Since 2018

Procter & Gamble (NYSE: PG) stock price jumped 60% from around $91 at 2018 end to $147 currently, primarily due to favorable changes in its revenues and P/S multiple. Additionally, the company witnessed a steady rise in its revenue per share, helped by a rise in the outstanding share count. However, despite the stock’s gains, PG has underperformed the S&P, which returned almost 70% over the same period.

In our interactive dashboard, Why Procter & Gamble Stock Moved: PG Stock Has Gained 60% Since 2018, we break down the factors behind this move.

PG’s Total Revenue has risen 19% from $66.8 billion in FY 2018 to $76.1 billion currently

  • PG’s total revenue has risen steadily from $66.8 billion in FY ’18 to $76.1 billion in FY ’21 (PG’s fiscal year ends in June), and currently stands at $79.6 billion on an LTM basis.
  • As of FY ’21, PG’s largest segment is Fabric & Home Care, contributing $26 billion to total sales, bringing in almost 35% of the company’s revenues.
  • Besides this, the health care segment has been the fastest growing segment, with sales rising over 20% between FY ’19 and FY ’21, standing at almost $10 billion as of FY ’21.
  • For details about PG revenues and comparison to peers, see Procter & Gamble Revenue Comparison

Revenue per share increased 26% from $25.70 in FY 2018 to $32.51 currently

  • PG revenue rose from $66.8 billion in 2018 to $79.6 billion currently, while the outstanding share count dropped from 2.6 billion in 2018 to 2.4 billion currently.
  • Due to this, RPS has risen steadily from $25.70 in FY ’18 to $32.51 currently.

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Price-To-Sales (P/S) multiple for PG rose strongly from 3.3x in 2018 to 5.2x by 2021 end but has pulled back to 4.5x currently, still almost 1.4x higher than its 2018 level

  • PG’s P/S multiple rose strongly to around 5.2x by late 2021, on the back of rising investor expectations surrounding continued demand growth for its products across all markets, leading to a rise in the company’s sales.
  • However, due to the increased economic uncertainty weighing on the broader markets, the P/S multiple has pulled back, currently standing at around 4.5x.
  • For additional details about the company stock returns and comparison to peers, see Procter & Gamble Stock Return Comparison.

With stock prices falling precipitously across sectors, we may be heading toward a bear market for the first time since March 2020, when the Covid-19 outbreak triggered a market crash. We capture key trends in the Dow during and after major market crashes in our interactive dashboard analysis, ‘Market Crashes Compared.’

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