Why Procter & Gamble Investors Will Continue to Clean Up

NEW YORK (TheStreet) – Nothing beats higher profits. Investors are waking up to this reality as shares of Procter & Gamble (PG) are soaring close to 4% Friday following the company's 38% jump in profits for its fiscal fourth quarter.

Shares are trading at around $80 following Procter & Gamble's Thursday close of $77.32. Prior to Friday's bounce, shares were down more than 1% on the year to date and down 2% in the trailing 12 months. But as the company's results, which included a 4-cent beats in earnings just demonstrated, management has never lost focus on the bottom the line.

With the stock still trading at more than 6% under its 52-week high, Procter & Gamble's ongoing efficiency improvements makes it one of the best sure-things on the market. At around $80 per share, the stock should reach $85 on the basis of margin expansion and growing cash flow. And when you factor the company's 3.20% dividend yield, this stock is not much of a gamble at all.

Management remains committed to returning value to shareholders. To that end, they've identified ways to grow revenue and margins by utilizing assets more efficiently. Procter & Gamble's plan of attack is to focus on core operations while effectively managing its brand portfolio. Management believes they can achieve these goals while also growing share in developing markets.

In that regard, whether through divestment or discontinuation, the company management plans to shed 100 under-performing brands from its portfolio in the next two years. This makes sense when you consider that 90% of the company's revenue and 95% of its profits will come from the brands that will remain.

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