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Andre Schneider
Proctor & Gamble Security Analysis
Proctor & Gamble
Current Statistics (as of February 27, 2006)
Stock Data
Price
52-Week High
52-Week Low
Average Volume (3 Months)
Market Capitalization
$59.93
$62.09
$51.86
7,588,260
$197.12B
Ratios (all per Share)
P/E Ratio
Earnings
Dividend
23.03
$2.66
$1.03
Financial Strength Ratios
Quick
Current
Long-Term D/E
Debt to Equity
Return on Equity (per Share)
Return on Assets
0.49
0.81
74.69
141.01
34.47
13.69
Growth Percentages (5-Year Growth)
Annual Growth
Revenue
Dividend Per Share
Earnings Per Share
Investment Recommendation: Hold
15.43%
7.27%
10.07%
15.93%
Company Profile & Background
Founded in 1837, Proctor and Gamble began as a company with less than 8000 dollars as
the foundation upon which it rested. By 1859 the company had reached the $1 million sales
mark. P&G quickly became a nationwide name when it advertised its first soap, Ivory in 1882.
P&G also became a beacon of employee rights for the nation when it built its worker-friendly
Ivory factory in 1886 and instituted one of the nation’s first profit-sharing programs to boost
worker productivity and pride. In 1911, P&G expanded its product base to include the
revolutionary Crisco shortening and by 1915 had began its long road of global expansion when it
built its first production facility in Canada. Realizing the importance of understanding consumer
habits, P&G created a market research department in 1924. In 1935, P&G acquired Philippine
Manufacturing Company to begin its development in the Far East. By 1946 P&G had invented
Tide, a detergent that far out performed any other detergent on the market.
During the ‘40s and ‘50s numerous expansions and inventions continued to propel P&G
towards its current position. Expansion into Mexico, Saudi Arabia, and France gave P&G a firm
footing in the international markets. Acquisitions of Charmin and Folgers both occurred during
the ‘50s and ‘60s. The ‘80s proved to be no different from any other decade for Proctor and
Gamble, with acquisitions of Norwich Eaton Pharmaceuticals, Richardson-Vicks (Vicks
respiratory products), and in 1987 celebrated its 150 year anniversary. At this point in time, P&G
was the second oldest company of the 50 largest Fortune 500 companies. In 1989, acquisitions of
Noxell (CoverGirl, Noxzema, and Clarion) allowed entry into the cosmetic market.
A major international milestone occurred in 1993 when company sales outside the United
States accounted for more than fifty percent of sales. The rest of the 1990’s consisted of a major
restructuring, entry into the European tissue market, a management separation into four regional
areas, the invention and implementation of Olean as well as the invention of breakthrough
products like Febreeze, Dryel, and Swiffer.
The new millennium has contributed greatly to the success of Proctor and Gamble. By
2002 P&G officially had 12 Billion Dollar Brands. Actonel, introduced in 2000 to treat
postmenopausal osteoporosis, became P&G’s 13th Billion Dollar Brand by 2004 and is
recognized as P&G’s first pharmaceutical brand to reach this level. 2005’s merger with Gillette
has left P&G with an additional five Billion Dollar Brands. I will delve further into the
implications of this merger at a later point.
Executive Summary
Summary of Analytical Conclusions
After reviewing Proctor and Gamble’s 2005 Annual Report, it appears that they have
continued the P&G legacy of constantly growing and expanding with new products and M&A.
Every goal that Proctor and Gamble had set out to achieve over the past five years have either
been met or exceeded. Considering the rising prices of commodities, price discounting and trade
promotion that has occurred during FY2005, for Proctor and Gamble to achieve their lofty goals
yet again is a testament to the exceptional product mix balance and diversification. Growth goals
of 4-6% were set in 2000 and they sustained growth of over 7%. They have increased dividends
over the past 5 years by an average of 9.36%, including increases of 13.4% and 10.7% in 2004
and 2005 respectively. In addition to this current dividend growth, P&G boasts an impressive 49
consecutive years of dividend growth. The goal for EPS growth during FY2005 was 10%+ and
was easily met with a realized EPS growth of 11%. After merging with Gillette, their treasured
“Billion Dollar Brands” increased to 22 total brands.
The gains that both of these companies will gain from this merger is immense. Proctor
and Gamble will gain Gillette’s 70% market share in blades and razors, the number one premium
electric razor, as well as Oral-B’s 36% market share in toothbrushes. Gillette will gain access to
P&G’s extensive distribution network into quickly developing markets like China, where Gillette
will distribute to 2,000 different cities and 11,000 towns and villages which should add a
significant amount of revenue to its 2004 sales of $10.5 Billion.
Investment Recommendations
Pros:





Industry Leader
Constant Innovation
Steady Growth
Highly balanced and diversified
Large Dividend Growth



Weak growth compared to industry
How big can it get?
Growth dependent on developing markets’ economies
Cons:
My investment recommendation of Hold is due largely to the size of this
company. I firmly believe that this is a company that will contribute nicely to our
portfolio over the long run. We have already done quite well with Proctor and Gamble,
but with the consistency of the dividend growth plus the exceptional out performance of
the S&P 500, our unrealized gain should continue to grow. The stock has split four times
since late 1989 with the most recent occurring in June of 2004. This trend of a split every
four years suggests that the growth of Proctor and Gamble will continue far into the
future and the consistent appeal to smaller investors will also help to drive stock prices
further.
Economic and Industry Environment
Industry’s Relation to Economy
Product Life Cycle
The difficulty that lies within the evaluation of Proctor and Gamble is its diversity. Its
sector of Consumer Goods is easy to identify, but Cleaning Products hardly seems to
encompass the industry that Proctor and Gamble represents. Cleaning Products only
represent 1/3 of P&G’s sales and earnings, but for the sake of this analysis, Cleaning
Products will be the comparison industry.
Life Cycle Pattern
The typical life cycle of a cleaning product is relatively short. Consumers
constantly demand new and improved versions of old products. Consumers
demand products to become increasingly easier to use, environmentally friendly,
more potent and safer to consumers. Any company in this industry must place a
heavy weight in R&D in order to stay ahead of their competitors.
Sales Growth Potential
Product Demand
The only major area in which this industry can hope to grow further is in the
developing markets of the world. The industrialized countries of the world will
not increase the amount their economies spend on cleaning products; it will be the
developing markets like China, Vietnam, and South Africa that will deliver sales
growth to this stagnant industry.
Supply of inputs for product
While sales may not be increasing by any significant amount, raw material prices
are. This will pose a significant threat to certain segments of this industry that rely
heavily on commodities used to produce fabric care products.
Proctor and Gamble’s Relation to Industry
Domestic Competition
Proctor and Gamble receives competition from dozens of companies none of which
compare to the size or revenues of P&G. finance.yahoo.com suggests Johnson & Johnson
as a competitor, but while they are similar in size, they only share their sector of
consumer goods which is too broad to make a comparison. Johnson & Johnson has a
majority of their product line involved with pharmaceuticals and health care goods. The
competitor closest to P&G’s product mix is Colgate-Palmolive and the comparison for
2005 is listed below:
(in millions)
Net Sales
Net Income
Net Income Margin
Market Cap.
Dividend per Share (yield)
P&G
C-P
$56,741
$11,396
$7,257
$1,351
12.80%
11.80%
$197.92B
$28.22B
$1.12 (1.8%) $1.16 (2.1%)
Market Share & Foreign Competition
Proctor and Gamble is the global leader in all four of its core categories:
 Baby Care – greater than 35%
 Feminine Care – greater than 35%
 Fabric Care – greater than 30%
 Hair Care – greater than 20% (“extremely large and fragmented category”)
Any foreign competition Proctor and Gamble encounters will most likely occur in the
emerging markets of the world. Any of those competitors will most likely go out of
business after Proctor and Gamble is introduced into the market, or given a competitor
with an excellent product, an acquisition of the firm will occur as the past has proven
time and time again.
Company Position
Market Information
Marketing Fundamentals
Proctor and Gamble focuses its marketing primarily upon a Holistic Marketing Strategy.
Instead of P&G trying to sell a specific product or brand, it focuses on selling the
company as a whole. This marketing strategy includes a significant departure from the
traditional 30-second TV advertisement as it moves towards this holistic marketing
approach.
Product Development & R&D
Proctor and Gamble devotion to R&D and product development is unprecedented.
According to their annual report, “We invest nearly $2 billion a year in R&D, which is
more than most of our direct competitors combined.” Clearly R&D is an extremely
important component to this firm. Also, despite this enormous amount spent on R&D,
over the past 5 years, R&D as a percentage of sales has decreased steadily even though
the capital spent on R&D is at an all time high.
Demographics
Proctor and Gamble encompasses all demographics. From rural China, to New York
City, P&G has products that appeal to every demographic on earth.
Pricing & Price Stability
Due to P&G’s role as a consumer products company, their pricing is contingent on raw
materials and competition, but as the industry leader in so many categories, they are able
to set prices at whatever levels are necessary to meet sales goals and revenue growth
goals.
Threat of Substitution
Many of P&G’s goods have multiple substitutes, but many of their top selling brands do
not because P&G strives to be an innovator on all fronts. They hold patents on many
products that do not expire for many more years to come. This eliminates the possibility
of substitutes for P&G’s top selling products.
Production
Economies of Scale
Proctor and Gamble has achieved economies of scale through their worldwide
production. Considering their sales of $56 billion, it is easy to deduce that they produce
goods at the lowest possible cost per unit.
Geographic Distribution
Proctor and Gamble distributes approximately 50% of its goods in North America. The
remainder is distributed throughout the world. Ten of P&G’s top 16 importing countries
are billion dollar markets as well as 8 of the 16 representing developing markets. This
balanced presence allows for P&G to ride out any unrest or business interruptions in any
particular country without risking significant losses to the company.
Image
Legal Proceedings
No outstanding lawsuits pending against P&G, although there are a number of lawsuits
that P&G has filed over the last several years claiming patent infringement.
Community Involvement
Proctor and Gamble’s main corporate cause is P&G Live, Learn and Thrive. This
program benefits the development of children in need from 0-13 years old. P&G donated
$25 million in 2005 through their employee contribution P&G Fund. Over $80 million
came directly from P&G to charitable efforts throughout the world. Through their PUR
filtration system, P&G has decontaminated over 200 million liters of water into safe
drinking water to help reduce illness in developing countries. After the tsunami in
Indonesia, P&G donated enough filtration equipment to purify 150 million liters of water.
Quality of Management
Achievement of past goals
In 2000, the management promised 4-6% sales growth, 10% EPS growth and 90% Free
Cash Flow Productivity. The 2005 Annual Report stated that the 2005 growth numbers
were 7% sales growth, 11% EPS growth and 90% FCF Productivity.
Goals for Future
P&G has increased their sales growth to 5-7% through 2010 and a continued 10% EPS
growth.
Financial Statement Analysis
Accounting Procedures
Inventory Valuation
“Inventories are valued at cost, which is not in excess of current market prices. Productrelated inventories are primarily maintained on the first-in, first-out method. Minor
amounts of product inventories, including certain cosmetics and commodities, are
maintained on the last-in, first-out method. The cost of spare part inventories is
maintained using the average cost method.”
Depreciation
“PP&E are recorded at cost reduced by accumulated depreciation. Depreciation expense
is recognized over the assets’ estimated useful lives using the straight-line method.
Machinery and equipment includes office furniture and equipment (15-year life),
computer equipment and capitalized software (3 to 5-year lives) and manufacturing
equipment (3 to 20-year lives). Buildings are depreciated over an estimated useful life of
40 years. Estimated useful lives are periodically reviewed, and where appropriate,
changes are made prospectively. Where certain events or changes in operating conditions
occur, asset lives may be adjusted and an impairment assessment may be performed on
the recoverability of the carrying amounts.
Investments Valuation
“Investment securities consist of auction rate securities that approximate fair value and
readily-marketable debt and equity securities that are classified as trading with unrealized
gains or losses charged to earnings.”
Goodwill and Other Intangibles
“The cost of intangible assets with determinable useful lives is amortized to reflect the
pattern of economic benefits consumed, principally on a straight line basis over the
estimated periods benefited. Goodwill and indefinite-lived intangibles, primarily brand
names and trademarks, are not amortized, but are evaluated annually for impairment. Our
impairment testing for goodwill is performed separately from our impairment testing of
individual indefinite-lived intangibles. The annual evaluation for impairment of goodwill
and indefinite-lived intangibles is based on valuation models that incorporate internal
projections of expected future cash flows and operating plans. We evaluate a number of
factors to determine whether an indefinite life is appropriate, including the competitive
environment, market share, brand history, operating plan and the macroeconomic
environment of the countries in which the brands are sold. Where certain events or
changes in operating conditions occur, indefinite-lived intangibles may be adjusted to a
determinable life and an impairment assessment may be performed.”
Pension Plans
The most prevalent pension plan is the defined contribution plans which are all fully
funded plans. Proctor & Gamble uses multiple factors to estimate the long-term expected
rate of return on plan assets. Approximated pension benefits pay outs over the next
several years are likely to range between $191 million in 2006 to $255 million in 2010.
Financial Ratios
Comparison to industry averages
Industry: Cleaning Products
Proctor & Gamble
Industry
Debt/Equity Ratio
0.48
0.92
Current Ratio
1.3
0.8
Quick Ratio
0.8
0.5
Sales (Quarter v. Year Ago Quarter)
26.90%
23.40%
Net Income (YTD vs YTD)
13.20%
17.70%
Net Income (Quarter v. Year Ago Quarter)
24.90%
-2.20%
Current P/E Ratio
22.9
22.3
Price/Sales Ratio
3.28
2.58
Price/Book Value
3.11
9.81
Return On Equity
12.00%
48.80%
Return On Assets
5.70%
12.20%
Return On Capital
8.00%
24.40%
Financial Condition
Growth Rates
Price Ratios
Investment Returns
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1
Trend Analysis v. Economy
1 Year Price Performance v. S&P 500
Proctor & Gamble
16.521%
%
13
8%
S&P 500
5.508%
3%
-3
%
5-Year Price Performance v. S&P 500
Proctor & Gamble
96.297%
S&P 500
4.477%
Both the 1-year and 5-year trend analyses versus the S&P 500 show extremely favorably
for Proctor and Gamble. The 5-year return on Proctor and gamble is currently at its 5-Year high
of 96.297%. This is a gross out performance of the S&P 500 which has managed a meager
4.477% return over the same 5-year period. The lack of performance of the S&P 500 is
understandable considering the 2001-2003 recessionary period. P&G’s out performance of the
S&P is a testament to how expansive its global position is. According to its website, Proctor and
Gamble products touch the lives of human beings over two billion times per day around the
world.
Even when looking at the 1-year trend analysis, Proctor and Gamble has again grossly
out performed the S&P 500 despite the bull market which has boosted all the indices to levels
near pre-2001 levels. Proctor and Gamble, despite reaching consistent 52-week highs, has
shown no signs of slowing down considering it beat the S&P by over 10%.
Common Size Consolidated Financial Statements
Procter and Gamble Company
Annual Common Size Income Statement (in millions)
6/30/2005
56,741.00
Net Sales
27,804.00
Cost of Goods Sold
28,937.00
Gross Profit
6/30/2004
51,407.00
25,076.00
26,331.00
2005
100.00%
49.00%
51.00%
2004
100.00%
48.78%
51.22%
1,940.00
16,070.00
n/a
346
834
10,439.00
1,802.00
14,702.00
n/a
152
629
9,350.00
3.42%
28.32%
3.51%
28.60%
0.61%
1.47%
18.40%
0.30%
1.22%
18.19%
3,182.00
7,257.00
2,869.00
6,481.00
5.61%
12.79%
5.58%
12.61%
R & D Expenditure
Selling, General & Admin Expenses
Depreciation & Amort.
Non-Operating Income
Interest Expense
Income Before Taxes
Prov. For Inc. Taxes
Net Income
Procter and Gamble Company
Common Size Balance Sheet
6/30/2005
6/30/2004
2005
2004
Assets
Cash
Marketable Securities
Receivables
Total Inventories
Raw Materials
Work In Progress
Finished Goods
Other Current Assets
Total Current Assets
6,389.00
1,744.00
4,185.00
5,006.00
1,424.00
350
3,232.00
3,005.00
20,329.00
4,232.00
1,660.00
4,062.00
4,400.00
1,191.00
340
2,869.00
2,761.00
17,115.00
10.38%
2.83%
6.80%
8.14%
2.31%
0.57%
5.25%
4.88%
33.04%
Property, Plant & Equipment, Net
Property, Plant & Equipment, Gross
Accumulated Depreciation
Deposits & Other Assets
Total Assets
14,332.00
26,325.00
11,993.00
2,703.00
61,527.00
14,108.00
25,304.00
11,196.00
1,925.00
57,048.00
23.29%
42.79%
19.49%
4.39%
100.00%
7.42%
2.91%
7.12%
7.71%
2.09%
0.60%
5.03%
4.84%
30.00%
0.00%
24.73%
44.36%
19.63%
3.37%
100.00%
Liabilities
Notes Payable
Accounts Payable
Curr. Long-Term Debt
Accrued Expense
Income Taxes
Other Current Liabilities
Total Current Liabilities
8,835.00
3,802.00
2,606.00
2,957.00
2,265.00
4,574.00
25,039.00
6,769.00
3,617.00
1,518.00
2,925.00
2,554.00
4,764.00
22,147.00
14.36%
6.18%
4.24%
4.81%
3.68%
7.43%
40.70%
11.87%
6.34%
2.66%
5.13%
4.48%
8.35%
38.82%
Deferred Charges/Inc.
Long-Term Debt
Non-Curr. Capital Leases
Other Long-Term Liab.
Total Liabilities
2,894.00
12,614.00
273
3,230.00
44,050.00
2,261.00
12,302.00
252
2,808.00
39,770.00
4.70%
20.50%
0.44%
5.25%
71.59%
3.96%
21.56%
0.44%
4.92%
69.71%
2,473.00
2,544.00
3,142.00
2,425.00
13,204.00 13,611.00
-1,342.00 -3,260.00
17,477.00 17,278.00
61,527.00 57,048.00
in millions of USD
4.02%
5.11%
21.46%
-2.18%
28.41%
100.00%
4.46%
4.25%
23.86%
-5.71%
30.29%
100.00%
Shareholder Equity
Common Stock
Capital Surplus
Retained Earnings
Other Liabilities
Total Shareholders Equity
Total Liabilities & Shareholders Equity
Cash Flow
(in Billions)
Cash Flow from Operating Activities
Free Cash Flow
2005
$8.72
$6.54
2004
$9.36
$7.34
Financial Forecasts
Revenue Forecasts
According to P&G’s 2005 Annual Report, sales growth is expected to continue at 5-7%
through 2010. Financial Forecasts from finance.yahoo.com are as follows:
Avg. Estimate
No. of Analysts
Low Estimate
High Estimate
Year Ago Sales
Sales Growth (year/est)
3.06.2006
Current Quarter
17.59B
9
17.29B
17.77B
14.29B
23.10%
6.06.2006
Next Quarter
17.66B
9
17.20B
17.92B
N/A
N/A
6.06.2006
Current Year
68.55B
12
67.68B
71.52B
N/A
N/A
6.07.2006
Next Year
74.85B
11
73.44B
76.70B
68.55B
9.20%
Projection of future longer-term
Earnings growth forecasts are provided by finance.yahoo.com:
Avg. Estimate
No. of Analysts
Low Estimate
High Estimate
Year Ago EPS
3.06.2006
Current Quarter
0.61
16
0.59
0.62
0.59
6.06.2006
Next Quarter
0.55
15
0.53
0.58
0.52
6.06.2006
Current Year
2.62
18
2.59
2.66
2.53
6.07.2006
Next Year
3.01
17
2.95
3.06
2.62
Analysis of Risk
Marketability
Trading Location – New York Stock Exchange
Average Volume (3-Month) – 7,767,090 Shares
Total Risk
Range - $58 - $72/Share
Systematic Risk
Proctor and Gamble is an extremely well diversified company that should be able to
avoid risk factors involving individual countries but will be susceptible to global
systematic risk factors such as global war and widespread terrorism.
Correlation to market
The 5-year correlation between P&G and the S&P 500 is .3981, as calculated in Excel
using weekly price data.
Beta to market
The 5-year beta to market for P&G is .4511, as shown below, calculated in Excel using
weekly price data.
Proctor & Gamble versus S&P 500
9.00%
= .4511
Proctor & Gamble
4.00%
-11.00%
-9.00%
-7.00%
-5.00%
-3.00%
-1.00%
-1.00%
-6.00%
-11.00%
S&P 500
1.00%
3.00%
5.00%
7.00%
Fundamental Valuation
Estimation of Required Rate of Return (k)
k = 4.5% + .451(6.38%)
k = 7.38%
Historical Equity Premium – 6.38%
Dividend Yield – 1.8%
Various Model Valuation
Dividend Discount Model
Price = Dividend/(r-g)  $1.12/(7.38%- 6%)  $81.16
I don’t like this model in particular simply because the assumed growth must be
continued into perpetuity. I cannot foresee P&G continuing to grow at 6% for more than
10 more years. Soon they will be
Warren Buffet Valuation Model
assuming discount rate (k) of
Owner Earnings in 2005:
Net Income
Depreciation & Amortization
Capital Expenditures
Owner Earnings
7.38%
$
$
$
$
7,257.00
1,884.00
2,181.00
11,322.00
Prior Year Owner Earnings
First Stage Growth Rate (add)
Owner Earnings
Discounted Value per annum
2005
$ 11,322.0
9.0%
$ 12,341.0
$12,341.0
2006
$12,341.0
9.0%
$13,451.7
$12,527.5
2007
$13,451.7
9.0%
$14,662.3
$12,716.8
2008
$14,662.3
9.0%
$15,981.9
$12,908.9
2009
$15,981.9
9.0%
$17,420.3
$13,104.0
Prior Year Owner Earnings
First Stage Growth Rate (add)
Owner Earnings
Discounted Value per annum
2010
$17,420.3
9.0%
$18,988.1
$13,302.0
2011
$18,988.1
7.0%
$20,317.3
$13,255.3
2012
$20,317.3
7.0%
$21,739.5
$13,208.7
2013
$21,739.5
7.0%
$23,261.3
$13,162.3
2014
$23,261.3
7.0%
$24,889.6
$13,116.0
Sum of present value of owner earnings
$129,642.4
Residual Value
Owner Earnings in year 10
Second Stage Growth Rate (g) (add)
Owner Earnings in year 11
Capitalization rate (k-g)
Value at end of year 10
$
24,889.6
6.50%
$
26,507.4
0.88%
$ 3,021,128.70
Present Value of Residual
Intrinsic Value of Company
$1,482,655.96
$1,612,298.35
Shares outstanding assuming dilution
Intrinsic Value per share
24729
$65.20
This model utilizes growth rates that are in par with an average between the company’s
annual report and the analysts’ growth rate estimates. The initial 5-year growth rate of
9% is ambitious considering P&G’s goal of 5-7%. That growth rate is rationalized by
P&G’s ability to beat its own goals over the last 5-years by more than one percent, it is
also reduced from the 11% average growth analysts are expecting.
Other Considerations
Analyst Recommendations
Recommendation Summary
Mean Recommendation (this week):
Mean Recommendation (last week):
Change:
Industry Mean:
Sector Mean:
S&P 500 Mean:
2.3
2.3
0
2.47
Price Target Summary
Mean Target:
66.08
Median Target:
67
High Target:
72
Low Target:
58
No. of Brokers:
13
Institutional Following
Holder
BARCLAYS BANK PLC
STATE STREET CORPORATION
BERKSHIRE HATHAWAY, INC
VANGUARD GROUP, INC. (THE)
NORTHERN TRUST CORPORATION
WELLINGTON MANAGEMENT COMPANY, LLP
FMR CORPORATION
MELLON FINANCIAL CORPORATION
JANUS CAPITAL MANAGEMENT, LLC
MARSICO CAPITAL MANAGEMENT, LLC
Total
Shares
122,677,529
104,090,237
100,000,000
80,042,637
56,021,888
50,405,818
48,600,576
43,063,619
42,386,469
40,332,000
687,620,773
%
Out
3.73
3.16
3.04
2.43
1.7
1.53
1.48
1.31
1.29
1.23
20.9
Value*
$7,294,405,874
$6,024,742,917
$5,788,000,000
$4,632,867,829
$3,242,546,877
$2,917,488,745
$2,813,001,338
$2,492,522,267
$2,453,328,825
$2,334,416,160
Reported
9.30.2005
12.31.2005
12.31.2005
12.31.2005
12.31.2005
12.31.2005
12.31.2005
12.31.2005
12.31.2005
12.31.2005
It should be noted that less than 1% of the shares outstanding are held by insiders.
Including mutual funds, institutions own 59% of outstanding shares of P&G. With this
level of ownership based in institutions, price volatility should be minimal, as the beta
suggests.
Conclusions
Proctor & Gamble is one of the strongest companies in the world. Their goals for
expansion and global dominance are both attainable and reasonable. Their growth rate is slightly
less than that for the “industry” P&G is in, but given their enormous size, the growth rates P&G
has been able to sustain and project for the future are impressive to say the least. With 22 Billion
dollar brands and another 13 brands above $500 million which are expected to reach the one
billion mark within the next several years, P&G’s growth will continue and it will earn us high
dividends and unrealized gains for many years to come.
Investment Recommendation: Hold