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

Colgate-Palmolive and Unilever Upending Procter & Gamble

NEW YORK ( TheStreet) -- Following the fate of consumer goods superstars Procter & Gamble (PG) and Colgate-Palmolive (CL) can be like watching a hit TV series.

Just when you think you've figured out what's going to happen next, the writers throw in a new plot twist to the plot.

PG and its future prospects don't seem to get the respect they deserve. And just when you think you've heard it all...

We recently learned that PG's former CEO, Bob McDonald, received compensation during his final full year at the world's largest consumer products maker of nearly $16 million, up 5% from the last year.

Then McDonald's retirement was suddenly announced in May as PG was under the gun to improve its bottom-line results. He was replaced by his predecessor, A.G. Lafley, who was given a prorated compensation deal of $2 million for the five weeks he served at the end of the company's fiscal year, according to a filing with the Securities and Exchange Commission.

But who cares when P&G, Colgate and European-based Unilever (UN) are seeing their shares sold off like bad apples? PG shares recently plunged to $77.33 before recovering a bit to around $78.

Yet, PG is still selling at a rich multiple. Shares have dropped 3.5% since the intraday high on my birthday, Aug. 21, (it feels so good to be 39 once again, but I digress). PG's PE ratio is still around 20. Below $78 a share the relative strength index (RSI) dips below 30, a technical oversold sign as well.

Investors wonder why PG's pint-size rival, Colgate-Palmolive, is afforded a current PE ratio of over 24 while PG only trades at slightly more than a PE of 20. PG, with a market cap of over $215 billion offers investors a current dividend yield-to-price of over 3%.

CL's market cap weighs in at around $54 billion and its current $1.36 annual dividend equates to a yield of only 2.34% when the price is at $58.22. Even when looking at the future (one-year) PE, CL sports almost a 19 and PG gets slightly less than 17. UN has a $109 billion market cap at a PE of 18.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
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!
DOW 17,156.85 +24.88 0.15%
S&P 500 2,001.57 +2.59 0.13%
NASDAQ 4,562.1890 +9.43 0.21%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

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