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Yield: Attractive and safe dividend yield supported by massive free cash flow generation.
Valuation: FCFF DCF indicates fair value of $163.44, closely matching the street internal valuation cross-checks of $163.77.
PG is a mature dividend payer with unmatched brand equity, generating consistent $14B+ in free cash flow to support a 61.8% payout ratio and steady buybacks. While structurally low-growth, its cash generation is highly resilient. Current valuation models anchor fair value at $163.44, implying 11.56% upside from the current $146.50 price.
PG is a mature dividend payer with unmatched brand equity, generating consistent $14B+ in free cash flow to support a 61.8% payout ratio and steady buybacks. While structurally low-growth, its cash generation is highly resilient. Current valuation models anchor fair value at $163.44, implying 11.56% upside from the current $146.50 price.
Unmatched brand equity across 65+ category-leading brands.
Immense pricing power evidenced by 51%+ gross margins.
Valuation: FCFF DCF indicates fair value of $163.44, closely matching the street internal valuation cross-checks of $163.77.
Buy. A quintessential portfolio anchor offering low volatility, reliable yield, and modest capital appreciation.
The Procter & Gamble Company provides branded consumer packaged goods worldwide. It operates through Beauty; Grooming; Health Care; Fabric & Home Care; and Baby, Feminine & Family Care segments. The company offers conditioners, shampoos, styling aids, and treatments under the Head & Shoulders, Herbal Essences, Pantene, and Rejoice brands; antiperspirants, deodorants, and personal cleansing products under the Native, Old Spice, Safeguard, and Secret brands; and facial moisturizers, cleaners, and treatments under the Olay and SK-II brands. It also provides blades, razors, shave products, appliances, and other grooming products under the Braun, Gillette, and Venus brands. In addition, the company offers toothbrushes, toothpastes, and other oral care products under the Crest and Oral-B brands; and gastrointestinal, pain relief, rapid diagnostics, respiratory, vitamins/minerals/supplements, and other personal health care products under the Metamucil, Neurobion, Pepto-Bismol, and Vicks brands. Further, it provides fabric enhancers, and laundry additives and detergents under the Ariel, Downy, Gain, and Tide brands; and air and dish care, P&G professional, and surface care under the Cascade, Dawn, Fairy, Febreze, Mr. Clean, and Swiffer brands. Additionally, the company offers baby wipes, and taped diapers and pants under the Luvs and Pampers brands; adult incontinence and menstrual care products under the Always, Always Discreet, and Tampax brands; and paper towels, tissues, and toilet papers under the Bounty, Charmin, and Puffs brands. It sells its products through mass merchandisers, social and e-commerce channels, grocery and specialty beauty stores, membership club stores, drug and department stores, distributors, wholesalers, airport duty-free and 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.
A sustained consumer recession forces widespread trade-down to private labels, breaking PG's pricing power. Volume contraction outpaces pricing actions, compressing operating margins below 20%.
Unmatched brand equity across 65+ category-leading brands.
Immense pricing power evidenced by 51%+ gross margins.
Global distribution scale creating insurmountable barriers to entry.
Economic profit is supported when reported returns exceed the company cost-of-capital hurdle.
Unavailable
FCFF DCF remains positive at the base case: base FCFF $15.8B after capex $3.8B, with terminal value at 68.4% of enterprise value. No FCF cliff is projected unless capex/ or materially resets.
If organic volume returns to positive territory, market will rerate the multiple. If pricing alone drives growth while volume bleeds, expect multiple contraction.
If organic volume returns to positive territory, market will rerate the multiple. If pricing alone drives growth while volume bleeds, expect multiple contraction.
If organic volume returns to positive territory, market will rerate the multiple. If pricing alone drives growth while volume bleeds, expect multiple contraction.
If organic volume returns to positive territory, market will rerate the multiple. If pricing alone drives growth while volume bleeds, expect multiple contraction.
Mature phase. Capital returns via dividends and buybacks vastly exceed reinvestment needs with capex at 4.5% of revenue.
Consumers accept structural price hikes. Premiumization drives mix benefits, expanding margins even on flat volume.
Inflation crushes real wages. Shoppers trade down from premium names to store brands.
Mature phase. Capital returns via dividends and buybacks vastly exceed reinvestment needs with capex at 4.5% of revenue.
Core portfolio anchor. Suitable for large allocations due to low beta and absolute dividend stability.
Trim sizing above $180 if volume growth stalls. Reassess if payout ratio approaches unsustainable levels.
Valuation: FCFF DCF indicates fair value of $163.44, closely matching the street internal valuation cross-checks of $163.77.
Quality: Wide economic moat with pristine balance sheet and cash conversion metrics.
Buy. PG is a quintessential mature dividend payer with unmatched brand equity, generating consistent $14B+ in free cash flow to support its 61.8% payout ratio. The $163.44 fair value presents an 11.56% upside.
Upside case: Yield: Attractive and safe dividend yield supported by massive free cash flow generation. Downside case: Valuation: FCFF DCF indicates fair value of $163.44, closely matching the street internal valuation cross-checks of $163.77.
Capture your own thesis, position size, and follow-up questions. Stays on this device, only you can see it.
Volume erosion due to consumer trade-down to private label brands amidst prolonged inflation or macro weakness, compressing both organic growth and operating margins.
Extended consumer weakness permanently shifts market share to private labels, structurally lowering terminal growth.
Inability to pass on sustained commodity inflation due to elastic demand, collapsing operating margins back to low-20s.
Persistent structural strength in the USD suppressing international revenue and earnings translation over a multi-year cycle.
The five developments that would weaken our investment case.
Top-line contraction reveals that premium pricing actions have exhausted consumer elasticity, driving shoppers toward private-label substitutes and permanently impairing organic sales momentum.
Current:0.3% for the period ended 2025-06-30.
Alert ifDecelerates below 0.0% over any fiscal year.
Gross profitability slipping beneath this boundary signals that elevated input and packaging commodities can no longer be offset by price increases, squeezing manufacturing profits.
Current:51.2% for the period ended 2025-06-30.
Alert ifCompresses below 48.0% over any fiscal year.
Operating margin compression below this level demonstrates that fixed cost deleverage and promotional spending are outpacing productivity savings, undermining the steady-compounder earnings algorithm.
Current:24.3% for the period ended 2025-06-30.
Alert ifCompresses below 21.0% over any fiscal year.
Diminishing capital efficiency indicates that escalated advertising outlays and administrative overhead are failing to stimulate market share gains, diluting shareholder capital productivity.
Current:19.0% as of 2026-05-08.
Alert ifDeclines below 15.0% over any four-quarter period.
A contraction in cash conversion impairs free cash flow generation, directly restricting the board ability to fund ongoing dividend hikes and share repurchases.
Current:1.115 as of 2026-05-08.
Alert ifFalls below 1.00 over any four-quarter period.
Each lens answers a different valuation question. Only included lenses set Fair value; floors and diagnostics provide context.
Apply a terminal P/E to the dated forward EPS path, then discount that future share value back to the analysis date.
Convert the revenue and margin path into after-tax free cash flow, discount the annual per-share amounts and at , then adjust for signed per current share.
Discount the explicit dividend path and its Gordon-growth terminal value at cost of equity.
Solve for the growth rate that makes the model value equal the report-date share price.
Pricing power fully offsets input cost inflation, while premiumization and mix improvements drive operating margin expansion toward 24-25%, sustaining mid-single-digit EPS growth.
PG maintains its quintessential mature dividend payer status. Stable $14B+ in free cash flow supports its 61.8% payout ratio and steady buybacks. Growth is structurally low but highly resilient.
Warning level: Decelerates below 0.0% over any fiscal year. Top-line contraction reveals that premium pricing actions have exhausted consumer elasticity, driving shoppers toward private-label substitutes and permanently impairing organic sales momentum.
Warning level: Compresses below 48.0% over any fiscal year. Gross profitability slipping beneath this boundary signals that elevated input and packaging commodities can no longer be offset by price increases, squeezing manufacturing profits.
Warning level: Compresses below 21.0% over any fiscal year. Operating margin compression below this level demonstrates that fixed cost deleverage and promotional spending are outpacing productivity savings, undermining the steady-compounder earnings algorithm.
Warning level: Declines below 15.0% over any four-quarter period. Diminishing capital efficiency indicates that escalated advertising outlays and administrative overhead are failing to stimulate market share gains, diluting shareholder capital productivity.
Warning level: Falls below 1.00 over any four-quarter period. A contraction in cash conversion impairs free cash flow generation, directly restricting the board ability to fund ongoing dividend hikes and share repurchases.
| $82.01B |
| $84.04B |
| $84.28B |
| +1.7% |
| Gross profit | $38.03B | $39.25B | $43.19B | $43.12B | +4.3% |
| Operating income | $18.43B | $19.11B | $19.69B | $21.07B | +4.6% |
| Net income | $14.74B | $14.65B | $14.88B | $15.97B | +2.7% |
| EPS (diluted) | $5.81 | $5.90 | $6.02 | $6.51 | +3.9% |
| EBITDA | $21.24B | $21.82B | $22.58B | $23.92B | +4.0% |
| R&D | — | — | — | — | — |
| SG&A | $20.22B | $21.11B | $23.31B | $22.67B | +3.9% |
Capital allocation should be evaluated against reinvestment needs, balance-sheet strength, and shareholder returns.
| Revenue | 84,284,000,000 |
|---|---|
| Cost of revenue | 41,164,000,000 |
| Gross profit | 43,120,000,000 |
| Operating expenses | 22,669,000,000 |
| Operating income | 20,451,000,000 |
| Non-operating items and tax | -4,477,000,000 |
| Net income | 15,974,000,000 |
| Total assets | 125,231,000,000 |
|---|---|
| Cash | 9,556,000,000 |
| Current assets | 25,392,000,000 |
| Total liabilities | 72,947,000,000 |
| Current liabilities | 36,058,000,000 |
| Shareholders’ equity | 52,012,000,000 |
Point-in-time financial data used in the 2026-05-08 analysis.
| Period | Revenue | EBITDA | Net income | Operating cash flow | Free cash flow | Capex | Depreciation and amortization | Stock-based compensation | Share repurchases | Dividends paid | Net debt issuance | Investing cash flow | Financing cash flow | Beginning cash | Ending cash | Cash and investments | Total debt | Operating margin | ROIC | WACC | ROIC − WACC spread |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022-06-30 | 80.2B | 21.2B | 14.7B | 16.7B | 13.6B | 3.2B | 2.8B | 528M | 10B | 8.8B | 1.9B | — | — | — | — | 7.2B | 32.3B | 22.2% | — | 5.5% | — |
| 2023-06-30 | 82B | 21.8B | 14.7B | 16.8B | 13.8B | 3.1B | 2.7B | 545M | 7.4B | 9B | 2.9B | — | — | — | — | 8.2B | 35.4B | 22.1% | — | 6.2% | — |
| 2024-06-30 | 84B | 22.6B | 14.9B | 19.8B | 16.5B | 3.3B | 2.9B | 562M | 5B | 9.3B | -2.4B | — | — | — | — | 9.5B | 33.4B | 23.7% | — | — | — |
| 2025-06-30 | 84.3B | 23.9B | 16B | 17.8B | 14B | 3.8B | 2.8B | 476M | 6.5B | 9.9B | 630M | — | — | — | — | 9.6B | 35.5B | 24.3% | — | — | — |
PG trades at 20.7x forward earnings against a peer median of 21.6x; EV/EBITDA of 14.6x against a peer median of 15.6x; 6 peers.
| KVUE |
| Kenvue Inc. |
| 14.8x |
| 2.2x |
| 12.8x |
| 14.4% |
| 17.8% |
| KMB | Kimberly-Clark Corporation | 13.1x | 2.0x | 11.9x | 111.7% | 19.6% |
| EL | The Estee Lauder Companies Inc. | 27.0x | 2.1x | 15.8x | -5.9% | 14.9% |
| CHD | Church & Dwight Co. Inc. | 23.4x | 3.6x | 17.4x | 16.8% | 20.2% |
