This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Is It Safe? Procter & Gamble Tries to Keep Up

"Is It Safe?" is a daily feature by Ratings that looks at a company's risk-and-reward potential. Find out if your stocks are safe each morning at 4.

Procter & Gamble (PG), which makes everything from diapers to batteries, dominates every aisle of the drugstore. So why are its competitors projected to grow faster?

It's hard to imagine the sort of catastrophe that could throw this consumer juggernaut off course. But as customers limit spending in the face of a bleak economy and a new chief executive gets ready to take the helm, even this behemoth deserves caution from investors. Ratings

Last week, P&G said Robert A. McDonald, the firm's chief operating officer, will replace A.G. Lafley as chief executive officer on July 1. Lafley has led the firm since 2000 and will remain chairman of its board.

While McDonald, a 30-year P&G veteran, has the market development and management experience needed of a CEO of a multinational consumer products firm, changes at the top can lead to management reshufflings and departures of unsuccessful candidates for the top job.

The move comes as analysts question whether Cincinnati, Ohio-based P&G is too big and diverse to deliver steady growth. While the company is known for its market-savvy strategies and merchandising talent, firms with narrower product lines are increasingly posing a threat.

There's also a fear that penny-pinching consumers will bypass well-known P&G brands for cheaper options. While the firm also offers less costly alternatives to its premium brands, they come with lower profit margins.

Analysts expect the company's fiscal 2010 earnings, which include results from the jettisoned Folgers unit, to fall 11%. The company's forecast calls for no more than 4% profit growth for the fiscal year that ends next June, excluding the Folgers sale.

Earnings for fiscal 2009, which ends in two weeks, are expected to rise 16%.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
BMY $65.26 0.00%
CL $68.75 0.00%
CLX $110.02 0.00%
JNJ $100.34 0.00%
KMB $106.37 0.00%


DOW 17,712.66 +34.43 0.19%
S&P 500 2,061.02 +4.87 0.24%
NASDAQ 4,891.2190 +27.8570 0.57%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs