Dividend powerhouse Procter & Gamble (PG 0.94%) owns a number of the world’s most beneficial shopper manufacturers, together with Tide detergent, Crest toothpaste, Pampers diapers, and Bounty paper towels. However during the last yr, its inventory has badly lagged the S&P 500.
How excessive has P&G’s inventory ever gotten? And may it get there once more?
The highest of the mountain
P&G inventory hit its all-time closing excessive of $179.90/share on Dec. 2, 2024. However 2025 hasn’t been variety to the shopper staples behemoth. The inventory is at present down greater than 13% from its all-time excessive.
P&G shares beat the market from December 2018 to November 2023. P&G returned 83.4% to the S&P 500’s 81.4%.
Picture supply: Getty Pictures.
Then, in December 2023, the S&P 500 rose sharply, whereas P&G’s inventory declined. Although P&G inventory recovered the very subsequent month, retaining tempo with the S&P 500 for the subsequent 9 months, that one-month blip was sufficient to derail the corporate’s historic efficiency. A yr later, on the day it hit its all-time excessive, its five-year whole return of 65.7% badly trailed the S&P 500’s 110.3% whole return.
What it tells us
It is a good reminder to take a look at a number of timeframes when researching a inventory’s historic efficiency. I like to recommend evaluating no less than the one-, five-, and 10-year returns of a inventory to the S&P 500 (and be sure you use whole returns — which think about reinvestment of dividends — when taking a look at dividend payers like P&G).
At this time, P&G’s fundamentals look sound. Income is at all-time highs of $84.3 billion, and internet revenue is up sharply at $16.1 billion over the identical timeframe. The corporate plans to chop 7,000 jobs and shed numerous underperforming manufacturers, focusing as a substitute on its main moneymakers. However gross sales of P&G’s higher-priced manufacturers could take a success within the occasion of a recession, which might be what’s weighing down the inventory.
John Bromels has positions in Procter & Gamble. The Motley Idiot has no place in any of the shares talked about. The Motley Idiot has a disclosure coverage.
