A Quick Look at the Procter & Gamble Profit Machine

January 25, 2013

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E = Equity to Debt Ratio Is Normal

The debt-to-equity ratio for Procter & Gamble is normal, but the balance sheet is in negative territory. This is normal for the company. Operating cash flow is over $13 billion.

	Debt-To-Equity	Cash	Long-Term Debt
PG	0.49	$5.30 Billion	$31.88 Billion
KMB	1.10	$1.25 Billion	$6.40 Billion
CL	1.95	$909.00 Million	$5.19 Billion

T = Technicals on the Stock Chart Are Strong

Procter & Gamble isn’t the place to be if you’re looking for extraordinary gains. It’s more about investing in an extraordinary company that will reward its investors at a slow and steady pace. Procter & Gamble has underperformed Kimberly-Clark Corporation (NYSE:KMB) and Colgate-Palmolive (NYSE:CL) over the past three years, but Procter & Gamble has outperformed those same competitors so far this year.

	1 Month	Year-To-Date	1 Year	3 Year
PG	7.33%	8.32%	16.07%	32.48%
KMB	3.27%	2.49%	24.96%	61.62%
CL	5.22%	5.73%	25.80%	47.41%

At $73.01, Procter & Gamble is currently trading above all its averages.

50-Day SMA	69.08
100-Day SMA	68.88
200-Day SMA	66.49

E = Earnings Have Been Inconsistent

It might surprise you that there hasn’t been much earnings growth over the past five years. However, revenue has increased every year since 2009.

	2008	2009	2010	2011	2012
Revenue ($)in billions	79.26	76.69	77.57	81.10	83.68
Diluted EPS ($)	3.64	4.26	4.11	3.93	3.66

We already know what happened this quarter. Now let’s take a look at previous quarters.

	9/2011	12/2011	3/2012	6/2012	9/2012
Revenue ($)in billions	21.53	22.14	20.19	19.82	20.74
Diluted EPS ($)	1.03	0.57	0.82	1.24	0.96

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