The Procter & Gamble Company (PG) Will Perform Well With A.G. Lafley

The global leader in Oral Care

Another peer of both Unilever and P&G is Colgate-Palmolive Company (NYSE:CL). Although Colgate-Palmolive Company (NYSE:CL) also offers personal and home-care products, its biggest business is oral care. According to ACNielsen, Colgate is the world’s leader in the Oral Care business with many toothbrush and toothpaste brands including Colgate Total, Colgate Max Fresh and Colgate Optic White. Colgate-Palmolive’s revenue percentage from emerging markets was 50%, higher than P&G. The emerging markets comprise Latin America, Greater Asia/Africa and Central Europe. Colgate-Palmolive has paid uninterrupted dividends since 1895. In 2012, it paid out $1.22 per share in dividends, with the payout ratio of 47.4%. Colgate-Palmolive is trading at around $61.20 per share, with the total market cap of $57.10 billion. The market values Colgate-Palmolive Company (NYSE:CL) at 14 times enterprise value over EBITDA. The dividend yield is decent at 2.2%.

Unilever and The Procter & Gamble Company (NYSE:PG) are also favored by income investors because of their historically consistent dividend increases. Unilever and P&G offers investors a higher dividend yield at 3.3% and 3%, respectively. Unilever is trading at $42.10 per share, with the total market cap of $119.20 billion. The market values the company at around 12.2 times EV/EBITDA. P&G has a bit higher EV multiple. At $81.90 per share, P&G is worth more than $224.4 billion on the market. It is valued at 12.6 times EV/EBITDA.

My Foolish take

I am totally bullish about the return of former chief A.G.Lafley. In the near future under his leadership, The Procter & Gamble Company (NYSE:PG)’s operating performance could be improved significantly. With global market-leading positions and decent dividend yields, I think investors could hold all three companies mentioned above for their long-term income portfolios.

The article P&G Will Perform Well With A.G.Lafley originally appeared on Fool.com and is written by Anh Hoang.

Anh HOANG has no position in any stocks mentioned. The Motley Fool recommends Procter & Gamble. Anh is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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