Volatile stock movement
From January 2, 2015, to June 16, 2016, the stock prices of all consumer packaged goods (or CPG) companies have seen volatile movements. Procter & Gamble’s (PG) stock price fell 2.3% to $79.55 on April 26, 2016, after results were released. The stock has fallen 7.8% since January 2, 2015.
In comparison, Colgate-Palmolive (CL) stock rose 2.7% to $71.16 on April 28, 2016, after results were released. However, the stock has risen 4.3% since January 2, 2015. Both PG and CL stocks have seen volatility since the start of 2015. Their stock prices were able to sustain some of the gains in September and October 2015 after the global market crash, particularly in Asia-Pacific.
Consistent upward movement
Clorox (CLX) stock rose 1.9% to $129.43 after it released its earnings on May 3, 2016. The stock has consistently risen since the beginning of 2015. However, it fell almost 6.4% to $121.13 on April 21, 2016, from $129.41 on April 6, 2016. CLX stock has risen 28.2% since January 2015. It’s trading at its two-year peak of $133.11.
Similarly, Church & Dwight’s (CHD) and Kimberly-Clark’s (KMB) stock prices have risen 25.7% and 15.1%, respectively, since January 2015. The benchmark S&P 500 Index (SPY) (IVV) (VOO) has risen ~1% over the same period.
Dividends and share repurchases
Procter & Gamble (PG) declared a quarterly dividend increase of ~$0.67 per share on April 8, 2016, payable on or after May 16, 2016. For fiscal 2016, PG increased its dividend for the 60th consecutive year. Clorox and Colgate didn’t repurchase any shares in 1Q16. Clorox’s debt-to-EBITDA ratio of 1.8x was below the targeted range of 2.0x–2.5x in 1Q16.
Next, let’s look at valuation multiples for CPG companies in 1Q16.