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Steady revenue growth has helped Procter & Gamble shares match market returns

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Procter & Gamble (NYSE: PG) The stock price rose nearly 60% from about $92 at the end of 2018 to $146 today, primarily due to favorable changes in revenue and the P/S multiple. In addition, the company saw steady growth in earnings per share, aided by a decline in the number of shares outstanding. The stock’s gains helped PG match the S&P’s return, which was just over 60% over the same period.

In our interactive dashboard Why Procter & Gamble Stock Moved: PG shares are up 58% since 2018We analyze the factors behind the move.

Total PG sales up 20% from $66.8 billion in FY2018 to $80.5 billion today

  • PG’s total revenue has grown from $66.8 billion in FY18 to $80.2 billion in FY22 (PG’s fiscal year ends in June), and is currently slightly higher at $80.5 billion.
  • As of FY22, Fabric & Home Care is PG’s largest segment, contributing $27.6 billion to total sales, accounting for approximately 35% of the company’s sales.
  • In addition, the healthcare segment was the fastest growing segment, with revenue growing nearly 20% between FY’20 and FY’22, reaching nearly $11 billion in FY’22.
  • For more information on PG earnings and peer comparison, see Procter & Gamble Income Comparison

Earnings per share grew 31% from $25.28 in fiscal 2018 to $33.09 today

  • PG’s revenue grew from $66.8 billion in 2018 to $80.5 billion today, while shares outstanding fell from $2.6 billion in 2018 to $2.4 billion today.
  • As a result, RPS has grown steadily from $25.28 in FY18 to $33.09 today.

The price-sales multiple (P/S) for PG has risen sharply from 3.6x in 2018 to 5.3x at the end of 2021, but is currently back at 4.4x, which is still 1.2x from levels of 2018.

  • PG’s P/S multiple rose sharply to around 5.3x by the end of 2021, driven by rising investor expectations of continued demand for its products across all markets, driven by the company’s revenue growth.
  • However, growing economic uncertainty in broader markets has caused the P/S multiple to fall and currently stands around 4.4x.
  • For additional information on company stock returns and peer comparisons, see Procter & Gamble stock returns comparison,

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