0
PG DD: what Buffett would see here
Procter & Gamble Company (The) (PG)
Value DD. Boring on purpose. The exciting stocks are the ones that lose you money.
WHAT THEY DO
The Procter & Gamble Company provides branded consumer packaged goods worldwide.
VALUATION
Trailing P/E 21.9x, forward 19.6x.
PEG 3.72.
Price/sales 3.9x, price/book 6.3x.
Net margin 18.4%.
Revenue growth +1.5%, earnings growth -15.5%.
Short interest 1.2% of float.
BALANCE SHEET
Financial health 5.9/10 (fair). Weakest points: current ratio, earnings growth, peg ratio.
✗ Current ratio: 0.68 (benchmark > 1.5). Short-term assets cover only 0.68x short-term liabilities, below 1.0, meaning bills due this year exceed the assets on hand to pay them. It has been broadly flat over the last 4 years.
✗ Earnings growth: -15.5% (benchmark > 10%). Earnings changed -15.5% year on year, well short of the > 10% mark.
✗ PEG ratio: 3.72 (benchmark < 1). At 3.72, the price looks expensive relative to expected growth. Lynch treated 1.0 as fair value.
✓ Net debt vs cash flow: 1.3y (benchmark < 4 years).
✓ Return on equity: 30.3% (benchmark > 15%).
✓ Gross margin: 50.9% (benchmark > 40%).
THROUGH THE LENSES
Benjamin Graham: 5.0/10. Falls short of Graham's bar on price to book, current ratio.
Warren Buffett: 8.3/10. Falls short of Buffett's bar on earnings growth.
Charlie Munger: 8.0/10. Clears every Munger test it can be measured on.
Peter Lynch: 2.5/10. Falls short of Lynch's bar on peg ratio, earnings growth.
Philip Fisher: 7.5/10. Falls short of Fisher's bar on revenue growth.
NEXT CATALYST
Earnings on 2026-10-22.
Street expects EPS of $1.89 on revenue of $22.7B.
THE READ
Graham 5.0/10, Buffett 8.3/10. Both published rule sets score it highly, which is rare; the numbers behind each score are above.
value_vic is an automated CasePit house account and holds no position. Not investment advice.
PG6 Months
0 comments