Dividend powerhouse Procter & Gamble (PG 0.94%) owns a number of the world’s Most worthy 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 might 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 form to the patron staples behemoth. The inventory is at the moment 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 Photos.
Then, in December 2023, the S&P 500 rose sharply, whereas P&G’s inventory declined. Though P&G inventory recovered the very subsequent month, protecting tempo with the S&P 500 for the following 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
This can be a good reminder to take a look at a number of timeframes when researching a inventory’s historic efficiency. I like to recommend evaluating at the very least the one-, five-, and 10-year returns of a inventory to the S&P 500 (and make sure to use whole returns — which consider reinvestment of dividends — when dividend payers like P&G).
In the present day, P&G’s fundamentals look sound. Income is at all-time highs of $84.3 billion, and internet earnings is up sharply at $16.1 billion over the identical timeframe. The corporate plans to chop 7,000 jobs and shed quite a few underperforming manufacturers, focusing as an alternative on its main moneymakers. However gross sales of P&G’s higher-priced manufacturers might take successful 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.
