Unilever is currently a better pick than P&G due to robust volume growth.

From Nasdaq: 2024-11-29 02:20:50

Unilever (NYSE: UL) is currently a better pick than Procter & Gamble (NYSE: PG) with a lower forward earnings multiple. UL stock has struggled in recent years, but is expected to outperform PG due to volume growth. P&G has seen better revenue growth, but UL is more profitable and has lower financial risk.

Unilever’s revenue has been driven by personal and home care segments with volume growth expected to continue. In contrast, P&G’s revenue growth has been led by pricing gains, with headwinds in beauty and baby care segments. UL’s debt has declined, but P&G has a better debt position and higher cash reserves.

Despite P&G’s better revenue growth and financial position, UL is seen as the better choice due to robust volume growth. P&G faces challenges in beauty and baby care, while UL remains resilient with growth in key segments. Both stocks are trading at higher multiples than historical averages. UL stock is currently trading at around $60, with a forward P/E ratio of 19x and expected earnings of $3.11 per share. PG stock is trading at $180, with a forward P/E ratio of 26x and expected earnings of $6.94 per share. Both stocks may have limited upside due to high valuation multiples.

In terms of returns, UL has seen a -3% return month-to-date in November 2024, with a YTD return of 25% and a total return of 89% since 2017. PG has a 9% return MTD, 25% YTD, and 163% total return since 2017. The S&P 500 has a 5% return MTD, 26% YTD, and 167% total return since 2017.

Investors may find UL more attractive for long-term gains over PG. It’s important to compare how Procter & Gamble’s peers perform to make informed investment decisions. Check out Trefis for more market-beating portfolios and price estimates.



Read more at Nasdaq: Pick P&G Stock Over Unilever?