Procter & Gamble: Beyond Market Fluctuations, Shareholders Take Center Stage

Core Thesis - Procter & Gamble (P&G) demonstrates excellence in capital allocation, making it a strong long-term investment despite short-term challenges in the Consumer Packaged Goods (CPG) industry [2][19]. Capital Allocation - P&G has invested over $10 billion in share buybacks since September 2022, effectively reducing its shares outstanding by nearly one-third over the past 14 years [3][4]. - The company has a strong dividend history, having increased its dividend for 67 consecutive years, with a current dividend yield of 2.44$145 billion to shareholders through dividends and stock buybacks [4][19]. Financial Performance - P&G has achieved over 20% revenue growth and 41% EPS growth since 2020, although recent Q2 results for Fiscal Year 2024 indicate potential short-term headwinds [6][19]. - The company has experienced a 3% overall growth in net sales, primarily driven by price increases, as volume growth is stagnant in most categories [8][12]. Market Challenges - The CPG industry is maturing, with projected sales growth of only 5% CAGR until 2031, leading to increased price sensitivity and competition [12]. - P&G's sales in Greater China have declined by 15%, with premium brand SK-II experiencing a significant 34% drop in sales [8][11]. Competitive Positioning - P&G's strategy focuses on product superiority, allowing it to maintain pricing power despite industry challenges [12][19]. - Successful product innovations, such as the laundry pod and the rebranding of Gillette, highlight P&G's ability to adapt and thrive in a competitive landscape [12][19]. Investment Perspective - P&G is viewed as an excellent long-term hold for investors seeking to reduce portfolio volatility or build a dividend-focused portfolio [17][19].