Morgan Stanley’s Best Overweight & Quality Stocks: Top 25 Stocks

20. The Procter & Gamble Company (NYSE:PG)

Number of Hedge Fund Holders In Q2 2024: 64

Average Analyst EPS % Revision: -0.5%

The Procter & Gamble Company (NYSE:PG) is one of the biggest consumer goods companies in the world. It serves consumers all over the world through a portfolio of more than 80 brands which include well known ones such as Gillette and Oral-B. Its global presence and sizeable portfolio have enabled The Procter & Gamble Company (NYSE:PG) to develop a fortress balance sheet as evidenced by cash and equivalents of $9.5 billion. The Procter & Gamble Company (NYSE:PG)’s biggest business divisions in terms of revenue are its home care and fabric businesses. During the 2024 fiscal year, the division generated $29.5 billion in revenue which accounted for 37% of The Procter & Gamble Company (NYSE:PG)’s revenue. Overall, the company’s revenue during fiscal years 2022, 2023, and 2024 was $80 billion, $82 billion, and $84 billion. This shows that The Procter & Gamble Company (NYSE:PG) has managed to grow its revenue consistently in an economy that has been constrained by inflation. This has primarily come through price increases, but as inflation drops, further growth might prove evasive right when The Procter & Gamble Company (NYSE:PG)’s expenses have also grown.

The Procter & Gamble Company (NYSE:PG)’s management shared details for pricing and volume growth during the Q2 2024 earnings call:

“Moving onto fourth quarter results, organic sales rounded down to 2%, volume was up 2%, solid sequential progress. Pricing was up 1% and mix was in line with prior year. Growth continues to be broad-based across categories and regions.

Nine of 10 product categories grew or held organic sales in the quarter. Home care, hair care, grooming and oral care were each up high single digits, feminine care up low singles, skin and personal care, fabric care, personal health care and family care were each in line with prior year, and baby care was down mid singles. Five of seven regions grew organic sales with focus markets up 2% and enterprise markets up 2% for the quarter. Organic sales in North America grew 4% with four points of volume growth and price mix, in line with prior year. European focus markets organic sales were up 2% against a strong 12% comp in the base period. Volume was up 3%. Price mix was down a point as the region has now fully annualized prior year inflation-driven pricing.

Latin America organic sales were up 8%, including high singles growth in Brazil. Of note, Argentina’s overall contribution to organic sales for the region and the company were lower than the last two quarters due to the divestiture of a portion of the business in March and a notable decline in shipment volume for the remaining categories.”