PG
The Procter & Gamble Company
Consumer Defensive · Household & Personal Products · United States · Stock
Score Breakdown
Scored for Safe Long-Term Investing profile
Sub-scores are 0–20 each; Model Score is weighted by your selected investment goal. How it works →
Why Ranked Here
- Strong profitability metrics — including a 24.3% operating margin, 19.0% net margin, and 12.8% return on assets in FY2025 — anchored the composite score and supported the Core Holding Candidate label.
- Near-flat revenue growth of 0.3% in FY2025 and a declining sequential quarterly earnings trend tempered the growth and momentum components of the score.
- The absence of a macro theme assignment meant no thematic tailwind was applied, which weighed on the composite alongside the moderate dividend score driven by the 61.8% payout ratio.
Why Not Higher
- Top-line growth of only 0.3% in FY2025 and a clear sequential decline in revenue, net income, and operating income across the most recent quarters limited the growth and momentum scores.
- The 61.8% dividend payout ratio in FY2025 moderated the dividend score, and the lack of any macro theme assignment meant the model applied no thematic tailwind to the composite.
Data Confidence
10 / 10
Very High — full data coverage
Why This Score
Grounded in figures from this company's SEC EDGAR filings — not a restatement of the score itself.
Revenue grew only +0.3% from FY2024 to FY2025 (from $84,039,000,000 to $84,284,000,000), while net income rose +7.4% and diluted EPS increased +8.1% over the same period.
The model appears to have rewarded the meaningful bottom-line expansion in FY2025 but tempered the score due to near-flat top-line growth, reflecting a mixed picture where profitability improved significantly faster than revenue.
In FY2025, P&G posted an operating margin of 24.3%, a net margin of 19.0%, and a return on assets of 12.8%, all reflecting strong earnings efficiency relative to sales and assets.
The model rewarded these high-quality profitability metrics, as a 24.3% operating margin and 19.0% net margin in FY2025 indicate that P&G retains a substantial share of each revenue dollar, while a 12.8% return on assets signals effective deployment of its asset base.
Filing evidence currently available does not support a more specific explanation for this factor.
Over the last four reported quarters, revenue peaked at $22,386,000,000 in 2026Q1 before declining to $22,208,000,000 in 2026Q2 and $21,235,000,000 in 2026Q3; similarly, net income peaked at $4,750,000,000 in 2026Q1 and stepped down to $4,319,000,000 in 2026Q2 and $3,932,000,000 in 2026Q3, with operating income following the same pattern from $5,856,000,000 in 2026Q1 to $4,576,000,000 in 2026Q3.
The model likely recognized the initial sequential improvement from 2025Q4 into 2026Q1 but penalized the subsequent deceleration across revenue, net income, and operating income in the two most recent quarters, producing a moderate momentum score.
P&G has grown its dividends per share consistently from $3.6806 in FY2023 to $3.8286 in FY2024 and $4.0763 in FY2025, while carrying a dividend payout ratio of 61.8% of net income in FY2025.
The model appears to have credited the steady multi-year dividend growth trend but may have moderated the score due to the relatively high 61.8% payout ratio in FY2025, which leaves a narrower margin of earnings retained for reinvestment or future dividend increases.
P&G is not currently assigned to any of the 24 tracked macro themes in the model.
The absence of a macro theme assignment means the model did not apply any thematic tailwind to P&G's score; this reflects the current classification state and should not be read as a commentary on the company's business quality.
Research Summary
AI-generated analysis reflects data and conditions as of the report date shown above. Verify any specific figures through primary sources before acting on this analysis.
Procter & Gamble earned a composite score of 62.3/100 and is classified as a Core Holding Candidate with a Very Low risk rating, reflecting a business that excels in profitability and financial health but faces headwinds from near-flat revenue growth and recent sequential earnings deceleration. In FY2025, P&G posted an operating margin of 24.3% and a net margin of 19.0%, while net income grew 7.4% and diluted EPS rose 8.1% even as revenue expanded only 0.3%. The company has delivered consistent dividend-per-share growth across three consecutive fiscal years, though a 61.8% payout ratio in FY2025 limits retained earnings flexibility. The absence of a macro theme assignment means no thematic tailwind was applied to the composite score.
Plain English
P&G is a highly profitable, low-risk company that keeps a lot of what it earns and steadily raises its dividend, but its sales are barely growing and its recent quarterly profits have been trending downward, which holds back its overall score.
Bull Case vs. Bear Case
Bull Case
- P&G's profitability is exceptional: a 24.3% operating margin and 19.0% net margin in FY2025 show the company retains a large share of every revenue dollar, while a 12.8% return on assets signals efficient use of its $125.2 billion asset base.
- Bottom-line growth significantly outpaced top-line growth in FY2025, with net income rising 7.4% and diluted EPS climbing 8.1% against only 0.3% revenue growth, demonstrating meaningful margin expansion and earnings quality.
- P&G has grown dividends per share consistently from $3.6806 in FY2023 to $3.8286 in FY2024 and $4.0763 in FY2025, reflecting a reliable and rising income stream for shareholders.
Bear Case
- Revenue growth was essentially flat at just 0.3% from FY2024 to FY2025, suggesting limited top-line momentum and potential difficulty sustaining earnings growth without volume or pricing expansion.
- Quarterly results show a clear deceleration: revenue fell from $22,386,000,000 in 2026Q1 to $21,235,000,000 in 2026Q3, and net income dropped from $4,750,000,000 to $3,932,000,000 over the same period, indicating near-term earnings pressure.
- The 61.8% dividend payout ratio in FY2025 leaves a relatively narrow margin of retained earnings for reinvestment or future dividend increases, which could constrain financial flexibility if earnings growth slows.
What Could Change the Picture
Bullish Triggers
- A reacceleration in quarterly revenue and net income back toward or above the 2026Q1 peak levels would signal that the recent deceleration was temporary and that underlying demand remains robust.
- Assignment to one or more of the model's 24 tracked macro themes could apply a thematic tailwind to the composite score, reflecting improved alignment with broader economic trends.
Bearish Triggers
- If the sequential quarterly decline in revenue and operating income continues beyond 2026Q3, it would suggest structural rather than seasonal weakness, undermining the profitability story.
- A meaningful increase in the dividend payout ratio beyond 61.8% without corresponding earnings growth would raise concerns about dividend sustainability and balance sheet flexibility.
Risk Profile
Very Low RiskP&G carries a Very Low risk rating, supported by a substantial asset base of $125.2 billion in FY2025 and strong profitability metrics that provide a cushion against adverse conditions. However, the sequential decline in quarterly revenue and net income from 2026Q1 through 2026Q3 represents a near-term operational trend worth monitoring.
This report is for educational and research purposes only. It does not constitute financial, investment, legal, or tax advice — always conduct your own due diligence before making investment decisions.