MMarketMath

PG

Slow growerQuality: High (73/100)1 red flag

Procter & Gamble · Consumer Staples · Personal Care Products

$146.60

52w 137.62 – 167.25

20y monthly, adjusted

Mkt cap

$340.8B

P/E

21.0

P/FCF

22.2

FCF yield

4.5%

ROE

29.5%

Shldr yield

4.5%

div 3.0% + bb 1.5%

What today's price assumes

At $340.8B, the market is pricing in 9.1% annual free-cash-flow growth for the next decade (10% discount rate, 2.5% terminal growth). Over the last ten years, FCF actually grew 2.3% per year — the price asks for acceleration beyond the historical record.

Simple DCF per-share range: $87 · $87 · $109 (4% / base / optimistic growth). An estimate, not a target.

Adjust the assumptions yourself →

Historical multiple lens

At its own median P/OCF of 12.0× across 19 years, PG would trade near $101/share (25th–75th percentile: $86–$150); it trades at 17.4× today.

Assumes the historical multiple regime persists — re-ratings can be permanent.

Growth record

Compound annual growth rates from as-filed 10-K data, split-adjusted

Rev 3y

+2.0%

Rev 5y

+2.7%

Rev 10y

+2.9%

EPS 5y

+3.8%

EPS 10y

+6.0%

FCF 5y

−0.6%

FCF 10y

+2.3%

Fundamentals

Fiscal 2008–2026, from SEC filings

Revenue

2008: $79.3B
2009: $76.7B
2010: $77.6B
2011: $81.1B
2012: $28.4B
2013: $29.2B
2014: $29.4B
2015: $70.7B
2016: $65.3B
2017: $65.1B
2018: $66.8B
2019: $67.7B
2020: $71.0B
2021: $76.1B
2022: $80.2B
2023: $82.0B
2024: $84.0B
2025: $84.3B
2026: $87.0B
$0$25.0B$50.0B$75.0B
08
12
16
20
24

Net income

2008: $12.1B
2009: $13.4B
2010: $12.7B
2011: $11.8B
2012: $10.8B
2013: $11.3B
2014: $11.6B
2015: $7.0B
2016: $10.5B
2017: $15.3B
2018: $9.8B
2019: $3.9B
2020: $13.0B
2021: $14.3B
2022: $14.7B
2023: $14.7B
2024: $14.9B
2025: $16.0B
2026: $16.0B
$0$5.0B$10.0B$15.0B
08
12
16
20
24

Free cash flow

2008: $12.0B
2009: $11.7B
2010: $13.1B
2011: $10.0B
2012: $9.3B
2013: $10.9B
2014: $10.1B
2015: $10.9B
2016: $12.1B
2017: $9.4B
2018: $11.2B
2019: $11.9B
2020: $14.3B
2021: $15.6B
2022: $13.6B
2023: $13.8B
2024: $16.5B
2025: $14.0B
2026: $15.1B
$0$5.0B$10.0B$15.0B
08
12
16
20
24

Diluted shares (lower is better)

2008: 3.3B
2009: 3.2B
2010: 3.1B
2011: 3.0B
2012: 2.9B
2013: 2.9B
2014: 2.9B
2015: 2.9B
2016: 2.8B
2017: 2.7B
2018: 2.7B
2019: 2.5B
2020: 2.6B
2021: 2.6B
2022: 2.5B
2023: 2.5B
2024: 2.5B
2025: 2.5B
2026: 2.4B
01.0B2.0B3.0B
08
12
16
20
24

Margins

10%20%30%40%08111417202326
Net marginFCF marginGross margin

Capital returned (dividends + buybacks)

2008: $14.7B
2009: $11.4B
2010: $11.5B
2011: $12.8B
2012: $10.2B
2013: $12.5B
2014: $12.9B
2015: $11.9B
2016: $11.4B
2017: $12.4B
2018: $14.3B
2019: $12.5B
2020: $15.2B
2021: $19.3B
2022: $18.8B
2023: $16.4B
2024: $14.3B
2025: $16.4B
2026: $15.3B
$0$5.0B$10.0B$15.0B
08
12
16
20
24

Cash vs long-term debt

$10.0B$20.0B08111417202326
CashLT debt

Quarterly

Discrete quarters from 10-Q filings; Q4 derived as fiscal year minus Q1–Q3. OCF is unwound from the year-to-date figures 10-Qs report. Compare to the same quarter a year ago — most businesses are seasonal.

Revenue by quarter

Q4'23: $20.6B
Q1'24: $21.9B
Q2'24: $21.4B
Q3'24: $20.2B
Q4'24: $20.5B
Q1'25: $21.7B
Q2'25: $21.9B
Q3'25: $19.8B
Q4'25: $20.9B
Q1'26: $22.4B
Q2'26: $22.2B
Q3'26: $21.2B
Q4'26: $21.2B
$0$10.0B$20.0B
23
24
25
26
26

Net income by quarter

Q4'23: $3.4B
Q1'24: $4.5B
Q2'24: $3.5B
Q3'24: $3.8B
Q4'24: $3.1B
Q1'25: $4.0B
Q2'25: $4.6B
Q3'25: $3.8B
Q4'25: $3.6B
Q1'26: $4.8B
Q2'26: $4.3B
Q3'26: $3.9B
Q4'26: $3.0B
$0$2.0B$4.0B
23
24
25
26
26
QuarterRevenueYoYNet incomeYoYEPSOCF
Q4'26 *$21.2B+1.5%$3.0B−15.8%1.26$5.1B
Q3'26$21.2B+7.4%$3.9B+4.3%1.63$4.0B
Q2'26$22.2B+1.5%$4.3B−6.7%1.78$5.0B
Q1'26$22.4B+3.0%$4.8B+20.0%1.95$5.4B
Q4'25 *$20.9B+1.7%$3.6B+15.3%1.48$5.0B
Q3'25$19.8B−2.1%$3.8B+0.4%1.54$3.7B
Q2'25$21.9B+2.1%$4.6B+33.5%1.88$4.8B
Q1'25$21.7B−0.6%$4.0B−12.4%1.61$4.3B
Q4'24 *$20.5B−0.1%$3.1B−7.3%1.27$5.8B
Q3'24$20.2B+0.6%$3.8B+10.5%1.52$4.1B
Q2'24$21.4B+3.2%$3.5B−11.8%1.40$5.1B
Q1'24$21.9B+6.1%$4.5B+14.8%1.83$4.9B
Q4'23 *$20.6B+5.3%$3.4B+10.9%1.37$5.3B

Track record

Compound annual growth by period. For debt and share count, negative is the good direction.

Series3y5y10y15y
Revenue+2.0%+2.7%+2.9%+0.5%
Operating cash flow+5.1%+1.3%+2.4%+2.6%
Free cash flow+3.2%−0.6%+2.3%+2.8%
EPS (diluted)+3.9%+3.8%+6.0%+3.5%
Equity+4.9%+3.1%−0.7%−1.5%
LT debt−2.1%−0.2%+1.9%+0.2%
Diluted shares−0.8%−1.4%−1.6%−1.4%
Stock price+0.9%+3.2%+8.2%+8.8%

$100, 3 years ago

$103vs $176 in SPY

0.9% vs 20.7%/yr

$100, 5 years ago

$117vs $181 in SPY

3.2% vs 12.6%/yr

$100, 10 years ago

$220vs $412 in SPY

8.2% vs 15.2%/yr

$100, 15 years ago

$355vs $813 in SPY

8.8% vs 15.0%/yr

The $1 test — market value created per $1 of earnings retained (Buffett's hurdle: at least $1)

Last 5 years

$0.85

$24.7B created / $29.1B retained

Last 10 years

$3.48

$164.6B created / $47.3B retained

Quality & capital discipline

Cash-based returns and how management deploys capital

Cash ROIC

25.3%

OCF ÷ (equity + debt)

OCF / EV yield

5.6%

MC vs 10× OCF

1.72

≤1 = priced under 10× OCF

Debt / FCF

1.5y

SBC / FCF

3.5%

Owner earnings

$14.6B

OCF − capex − SBC

OE yield

4.3%

Share count 5y

−1.7%

per year; negative = buybacks

Capital intensity

29.1%

net PP&E ÷ revenue

Sales efficiency

$0.34

new PP&E per $1 new revenue, 5y

Growth engine (5y): reinvested 8.5% of operating cash flow at an incremental return of 15.3% — an organically fundable growth rate of about 1.3% per year (growth ≈ reinvestment rate × incremental ROIC).

Checklist

19 of 26 checks pass · 73%. Checks with structurally missing inputs are excluded.

Growth & Consistency

3/7

  • Revenue growth

    2.7% · 5y CAGR ≥ 5%

    fail

  • EPS growth

    3.8% · 5y CAGR ≥ 5%

    fail

  • FCF growth

    -0.6% · 5y CAGR ≥ 5%

    fail

  • Revenue rises consistently

    9 of 9 · up in ≥ 7 of last 10 years

    pass

  • FCF consistently positive

    10 of 10 · positive in ≥ 8 of last 10 years

    pass

  • Profitable every year

    10 of 10 · net income > 0 in ≥ 8 of last 10

    pass

  • Cash flow keeps up with sales

    1.3% vs 2.7% · OCF CAGR ≥ 0.9× revenue CAGR

    fail

Profitability

6/6

  • Net margin

    18.4% · ≥ 8%

    pass

  • Operating margin

    22.7% · ≥ 10%

    pass

  • Gross margin stable or rising

    — · no drop > 2 pts over 3y

    na

  • Return on equity

    29.5% · ≥ 12%

    pass

  • Cash ROIC

    25.3% · ≥ 12%

    pass

  • FCF margin

    17.4% · ≥ 5%

    pass

  • Earnings back their cash

    OCF $19.6B vs NI $16.0B · OCF ≥ net income (latest FY)

    pass

Balance Sheet

4/5

  • Debt payable from cash flow

    1.5y · LT debt ≤ 3× FCF

    pass

  • Cash cushion

    44% · cash ≥ 50% of LT debt

    fail

  • Leverage

    0.42 · LT debt ≤ 1.5× equity

    pass

  • Equity positive and compounding

    $54.3B · equity > 0 and grew over ~5y

    pass

  • Interest burden

    4% · interest ≤ 15% of operating income

    pass

Capital Allocation

3/4

  • Share count flat or shrinking

    -1.7% · ≤ +0.5%/yr over ~5y

    pass

  • Stock comp restrained

    3% · SBC ≤ 15% of FCF

    pass

  • Distributions funded by FCF

    101% · dividends + buybacks ≤ 100% of FCF

    fail

  • Repurchases are a habit

    10 of 10 · buybacks in ≥ 5 of last 10 years

    pass

Valuation Discipline

3/4

  • FCF yield

    4.5% · ≥ 3%

    pass

  • Earnings multiple

    21.0 · P/E ≤ 25

    pass

  • Price asks less than history delivered

    9.1% vs 2.3% · implied FCF growth ≤ historical FCF CAGR

    fail

  • Shareholder yield

    4.5% · dividends + buybacks ≥ 2% of market cap

    pass

Red flags

Mechanical checks — a flag is a question to investigate, not a verdict

Distributions exceed FCF

Dividends plus buybacks exceeded free cash flow in the latest fiscal year.

Financial data

As filed in 10-Ks; per-share figures split-adjusted. $ in millions.

FYRevenueGross profitOp incomeNet incomeEPSOCFCapExFCFDividendsBuybacksSBCCashLT debtEquityShares
202687,032—19,74816,0466.6219,5564,40915,14710,2325,0285249,94222,84254,3112,423
202584,284—20,45115,9746.5117,8173,77314,0449,8726,5004769,55624,99552,2842,454
202484,039—18,54514,8796.0219,8463,32216,5249,3125,0065629,48225,26950,5592,472
202382,006—18,13414,6535.9016,8483,06213,7868,9997,3535458,24624,37847,0652,484
202280,187—17,81314,7425.8116,7233,15613,5678,77010,0035287,21422,84846,8542,539
202176,118—17,98614,3065.5018,3712,78715,5848,26311,00954010,28823,09946,6542,601
202070,950—15,70613,0274.9617,4033,07314,3307,7897,40555816,18123,53746,8782,626
201967,684—5,4873,8971.4315,2423,34711,8957,4985,0035154,23920,39547,5792,540
201866,832—13,3639,7503.6714,8673,71711,1507,3107,0043952,56920,86352,8832,657
201765,058—13,76615,3265.5912,7533,3849,3697,2365,2043515,56918,03855,7782,740
201665,299—13,44110,5083.6915,4353,31412,1217,4364,0043358,09818,94557,9832,844
201570,749—11,0497,0362.4414,6083,73610,8727,2874,6043376,83618,32763,0502,884
201429,400—13,91011,6434.0113,9583,84810,1106,9116,0053608,54819,81169,9762,905
201329,200—13,81711,3123.8614,8734,00810,8656,5195,9863465,93019,11168,7092,931
201228,400—13,03510,7563.6613,2843,9649,3206,1394,0243774,43621,08064,0352,941
201181,104—15,49511,7973.9313,3303,30610,0245,7677,0394142,76822,03368,0013,002
201077,567—15,73212,7364.1116,1313,06713,0645,4586,0044532,87921,36061,4393,099
200976,694—15,37413,4364.2614,9193,23811,6815,0446,3705164,78120,65263,3823,154
200879,257—15,97912,0753.6415,0083,04611,9624,65510,0475553,313—69,7843,317

Some concepts are structurally absent for certain industries (banks report no gross profit or capex). Missing ≠ zero.

Compare with peers →·10-K filings on EDGAR ↗