HomeMost PopularProcter & Gamble: Navigating Macro Worries with Impressive Norms

Procter & Gamble: Navigating Macro Worries with Impressive Norms

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The consumer staples sector, amid its resilient traits and high-quality dividend (growth) stock options, presents a compelling landscape for investors. Within this sector, Procter & Gamble (NYSE:PG) has sustained its position as a top-tier compounder, highlighting robust pricing power and strategic resilience.

Weathering Macroeconomic Challenges

While prevailing economic conditions reflect amplified inflation concerns and dwindling consumer sentiment, Procter & Gamble has defied these trends, demonstrating a commendable 7% growth in organic sales and a remarkable 17% boost in EPS for the first quarter of fiscal year 2024.

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The company’s exceptional performance, characterized by a 7-point contribution from pricing, underscores its robust pricing power amidst a challenging market environment. Geographically, while facing a temporary decline in Greater China, Procter & Gamble has maintained a positive trajectory in other focus markets, particularly in the US and Europe, emphasizing the versatility of its product approach.

Outlook & Shareholder Distributions

Procter & Gamble, despite the volatile operating backdrop, continues to maintain its guidance ranges, projecting organic sales growth of 4% to 5% for the fiscal year. Additionally, the company plans to return an impressive $14 billion to $15 billion of cash to shareholders through dividends and stock repurchases.


The company’s consistent commitment to shareholder value is further underscored by its history of 67 consecutive dividend hikes, coupled with a current yield of 2.5% and a sustainable 60% payout ratio.

Stock Valuation and Alternatives

Despite its commendable performance and long-term potential, Procter & Gamble’s current blended P/E ratio of 24.9x raises valuation concerns, surpassing its normalized rate of 20.4x earnings over the past 20 years.


Considering alternative prospects, PepsiCo and Hershey’s emerge as compelling alternatives in the consumer compounders’ domain, offering substantial room for growth and comparative market positioning.


Procter & Gamble continues to exemplify resilience and strategic prowess, cementing its position in the consumer staples sector. While the stock’s current valuation may deter immediate entry, its long-term performance remains robust, fostering investor confidence amid evolving market conditions.

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