Buy or Sell Procter & Gamble Stock Before Earnings?
Procter & Gamble (NYSE: PG) is a large cap company that operates within the household products industry. Its market cap is $234 billion today, and the total one-year return is 6.13% for shareholders.
Procter & Gamble stock is underperforming the market. It's beaten down, but it reports earnings soon. So is it a good time to buy? To answer this question, we've turned to the Investment U Stock Grader. Our Research Team built this system to diagnose the financial health of a company.
Our system looks at six key metrics...
✗ Earnings-per-Share (EPS) Growth: Procter & Gamble reported a recent EPS growth rate of 12.56%. That's below the household products industry average of 200.9%. That's not a good sign. We like to see companies that have higher earnings growth.
✓ Price-to-Earnings (P/E): The average price-to-earnings ratio of the household products industry is 32.14. And Procter & Gamble's ratio comes in at 23.75. It's trading at a better value than many of its competitors.
✓ Debt-to-Equity : The debt-to-equity ratio for Procter & Gamble stock is 56.64%. That's below the household products industry average of 294.74%. The company is less leveraged.
✗ Free Cash Flow per Share Growth : Procter & Gamble's FCF has been lower than that of its competitors over the last year. That's not good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth. It's one of our most important fundamental factors.
✓ Profit Margins : The profit margin of Procter & Gamble comes in at 13.78% today. And generally, the higher, the better. We also like to see this margin above that of its competitors. Procter & Gamble's profit margin is above the household products average of 7.43%. So that's a positive indicator for investors.
✗ Return on Equity : Return on equity tells us how much profit a company produces with the money shareholders invest. The ROE for Procter & Gamble is 27.89%, and that's below its industry average ROE of 52.52%.
Procter & Gamble stock passes three of our six key metrics today. That's why our Investment U Stock Grader rates it as a Hold.
Please note that our fundamental factor checklist is just the first step in performing your own due diligence. There are many other factors you should consider before investing. That's why The Oxford Club offers more than a dozen newsletters and trading advisories all aimed at helping investors grow and maintain their wealth.
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