The Beauty segment offers antiperspirants and deodorants, cosmetics, personal cleansing, skin care, hair care, hair colors, prestige products, and professional salon products under the Head & Shoulders, Olay, Pantene, SK-II, and Wella brand names. The Grooming segment provides blades and razors, pre- and post-shave products, and electronic hair removal devices under the Braun, Fusion, Gillette, Mach3, and Prestobarba brand names. The Health Care segment offers feminine care and incontinence products; toothbrush, toothpaste, and other oral care products; and gastrointestinal, rapid diagnostics, respiratory, vitamins, and other personal health care products. This segment markets its products under the Always, Crest, Oral-B, and Vicks brand names. The Fabric Care and Home Care segment provides bleach and laundry additives, fabric enhancers, and laundry detergents; air care, dish care, and surface care products; batteries; pet care products; and professional products. This segment sells its products under the Ace, Ariel, Dawn, Downy, Duracell, Febreze, Gain, Iams, and Tide brand names. The Baby Care and Family Care segment offers baby wipes, diapers, pants, paper towels, tissues, and toilet papers under the Bounty, Charmin, and Pampers brand names.
The company markets its products through mass merchandisers, grocery stores, membership club stores, drug stores, department stores, salons, high-frequency stores, and e-commerce in approximately 180 countries worldwide. The Procter & Gamble Company was founded in 1837 and is based in Cincinnati, Ohio. (Daily Chart) (Weekly Chart)
Revenues have also been increasing but at a very sporadic rate. There were up years followed by down years followed by up years. These are not the kind of revenue figures you would like to see from a large capitalization company. Fortunately estimates going forward continue the direction of those increasing revenues started in 2009.
Earnings are also sporadic with increases in earnings until 2009 and then falling for three years. While earnings improved during 2013, estimates aren't predicting an increase in earning above those delivered in 2009 until 2015.
I understand there was a recession in 2008 and 2009 which probably affected revenues and earnings, but by continuing to increase dividends when they weren't supported by increases in revenues and earnings caused the payout ratio to increase from 39% in 2009 to 60% in 2013. While some investors may dismiss this as dividends that are well within the company's ability to pay, it sends red flags up for me. This increased payout ratio reduces retained earnings in an industry that is known to be highly competitive. Any potential loss in competitive product development will eventually affect revenue and earnings. It's something I would monitor going forward. I would feel more comfortable if Proctor and Gamble had slowed their rate of increase in dividends during those lean years but still maintained it at a level in excess of inflation.
P/E Ratio = 21.51
Current Dividend = $2.41
Current Yield = 3.00% ($2.41/$80.10)
1 Year Target = $86.95 or +8.55% ($86.95/$80.10)
Revenue Growth Rate 3 year = 2.73% 5 year = 0.15% 10 year = 6.85%
Earnings Growth Rate 3 year = -2.06% 5 year = 1.18% 10 year = 7.69%
Dividend Growth Rate 3 year = 7.94% 5 year = 9.11% 10 year = 10.69%