Procter & Gamble: Premium Valuation Is Not A Problem For Future Returns

Vladimir Dimitrov, CFA
6.48K Followers

Summary

  • I take a closer look at the key drivers behind Procter & Gamble's record-high valuation multiples.
  • The recent share price increase is sustainable, in spite of the company's premium valuation.
  • Gross margin improvement is to be expected which should offset any potential headwinds in fixed costs.
Procter & Gamble Reports Quarterly Earnings

Justin Sullivan/Getty Images News

With short-dated treasury yields standing at around 5%, the case for high yielding and slow growth consumer staple businesses has waned. That is why it is hardly a surprise that even a high quality business, such as Procter & Gamble (

Looking for better positioned high quality businesses in the consumer staples space? 

You can gain access to my highest conviction ideas in the sector by subscribing to The Roundabout Investor, where I uncover conservatively priced businesses with superior competitive positioning and high dividend yields.

Performance of all high conviction ideas is measured by The Roundabout Portfolio, which has consistently outperformed the market since its initiation. 

As part of the service I also offer in-depth market analysis, through the lens of factor investing and a watchlist of higher risk-reward investment opportunities. To learn more and gain access to the service, follow the link provided. 

This article was written by

6.48K Followers
Vladimir Dimitrov, CFA is a former strategy consultant within the field of brand and intangible assets valuation. During his career in the City of London he has been working with some of the largest global brands within the technology, telecom and banking sectors. He graduated from the London School of Economics and is interested in finding reasonably priced businesses with sustainable long-term competitive advantages.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of UL either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Please do your own due diligence and consult with your financial advisor, if you have one, before making any investment decisions. The author is not acting in an investment adviser capacity. The author's opinions expressed herein address only select aspects of potential investment in securities of the companies mentioned and cannot be a substitute for comprehensive investment analysis. The author recommends that potential and existing investors conduct thorough investment research of their own, including a detailed review of the companies' SEC filings. Any opinions or estimates constitute the author's best judgment as of the date of publication and are subject to change without notice.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

About PG Stock

SymbolLast Price% Chg
Market Cap
PE
Yield
Rev Growth (YoY)
Short Interest
Prev. Close
Compare to Peers

More on PG

Related Stocks

SymbolLast Price% Chg
PG
--