News about Procter & Gamble

Procter & Gamble shares rose 6% to $166.19 in morning trading after its Q1 FY2027 results beat expectations, with core EPS of $2 versus the $1.89 consensus and net sales of $23.28 billion against $22.82 billion expected. CFO Andre Schulten said the U.S. consumer is “remarkably resilient,” though lower-income shoppers are more cautious. The company kept its full-year outlook of 1% to 3% organic sales growth and core EPS of $6.89 to $7.11. Core gross margin fell 150 basis points year over year, and the company expects $1.4 billion in after-tax commodity cost pressure this fiscal year. Johnson & Johnson rose 3% and Coca-Cola 2% as defensive stocks drew buyers, while the SPDR S&P 500 ETF Trust fell 1%.

P&G reported fiscal first-quarter adjusted earnings of $2.00 per share and revenue of $23.3 billion, both ahead of analyst expectations of $1.88 and $22.8 billion according to an LSEG survey. Net sales rose 4% and volume grew 2.4%, led by the fabric and home care segment, which includes Tide and Febreze, with volume up 4.3%. The health care business was the weakest, with volume down 2.9%, while grooming volume fell 0.4%. P&G reiterated its fiscal 2027 core EPS forecast of $6.89 to $7.11 but raised its all-in sales growth outlook to 2% to 4% from 1% to 3%, reflecting the Thorne acquisition, which closed on Oct. 1. Shares rose more than 2% in premarket trading.

Procter & Gamble has raised its dividend annually for 70 consecutive years, and in fiscal 2026 it generated about $87 billion in net sales (up 3%), $16.1 billion in net earnings and $19.6 billion in operating cash flow. The company returned more than $15 billion to shareholders, including $10.2 billion in dividends and $5 billion in buybacks, though organic sales grew only 1%. Stryker, a medical technology maker of products such as artificial hips and knees and the Mako robotic surgery platform, reported Q2 2026 revenue of $6.6 billion (up 9.4%) and adjusted EPS up 17.9% to $3.69. The article argues that an aging population should support demand for Stryker's products, with Americans aged 65 and older projected to reach about 82 million by 2050. It concludes that P&G offers stability and dependable income, while Stryker offers exposure to a growing healthcare market.

The author notes that margin debt has risen 49% over the past year, a warning sign according to Fundstrat Global Advisors. Since 1960, when margin debt grew more than 45% year over year, the market has declined in 83% of cases, the firm found. Rather than panic, the author is building cash by selling lower-conviction holdings and focusing on high-quality dividend growth stocks, mainly through the Schwab U.S. Dividend Equity ETF (SCHD), which yields about 3% and holds 100 stocks. Procter & Gamble (PG), its second-largest holding at a 4.3% weighting, has raised its dividend for 70 straight years and yields nearly 3%, and the author recently added it as a defensive holding. Cash from sales and dividends will be available to buy if the market declines meaningfully over the next year.

The author bought Procter & Gamble (PG) for defensive stability, citing its 70 straight years of dividend increases and a market trading at a historically rich valuation. He weighed Church & Dwight (CHD), whose 4%+ annual organic revenue growth and 8%+ adjusted EPS growth over the past decade produced roughly 9% annualized total returns, but noted it trades at 26 times forward earnings with a yield of about 1.2%. P&G, by contrast, trades below 22 times forward earnings with a yield near 3%. The author estimates P&G could deliver about 8% annualized returns if earnings grow 5% per year with no valuation change, and 9–10% if its valuation recovers. He concludes P&G offers better long-term total return potential without needing fast growth.