The Procter & Gamble Company (PG): The Hedge Fund Trade

Page 2 of 2

By the numbers

Compared to major peers, P&G is rather cheap:

P&G Johnson
&
Johnson
ColgatePalmolive
Price to earnings 19 23 23
Price to sales 2.3 3.0 3.3

P&G also appears to be managing its inventory and receivables better than its competitors:

P&G Johnson
&
Johnson
Colgate-Palmolive
Inventory turnover 5.8 2.4 4.9
Receivables turnover 12.4 6.2 9.6

Don’t be fooled
P&G has an impressive 3.1% dividend yield, compared to Johnson & Johnson (NYSE:JNJ)’s 2.9% and Colgate-Palmolive Company (NYSE:CL)’s 2.3%. I also like P&G for its relatively strong balance sheet, with a 23% debt ratio, with Johnson & Johnson at 47% and Collage 39%. The Procter & Gamble Company (NYSE:PG) is a $300 billion market cap turnaround story, with billionaire Warren Buffett and Bill Ackman as backers, so it’s hard not to like the stock (check out why Ackman loves P&G).

Marshall Hargrave has no position in any stocks mentioned. The Motley Fool recommends Johnson & Johnson and Procter & Gamble. The Motley Fool owns shares of Johnson & Johnson.

The article Procter & Gamble a Buy After Plummeting originally appeared on Fool.com.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Page 2 of 2