Is Procter & Gamble Co. overvalued or undervalued?

As of 30 July 2024, Procter & Gamble Co. has moved from a fair to an expensive valuation grade. The company is currently considered overvalued, with a P/E ratio of 41, a Price to Book Value of 12.55, and an EV to EBITDA of 30.25. In comparison, Colgate-Palmolive Co. has a P/E of 40.09 and an EV to EBITDA of 26.40, while Kimberly-Clark Corp. shows a significantly lower P/E of 18.81 and an EV to EBITDA of 14.86, highlighting the premium at which Procter & Gamble is trading relative to its peers.
The company's return metrics also reflect its overvaluation, with a dividend yield of only 0.38% and a ROE of 30.69%, which, while impressive, does not justify the high valuation multiples. Additionally, Procter & Gamble has underperformed the S&P 500 over various time frames, including a 1-year return of -4.30% compared to the S&P's 10.26%. This further supports the conclusion that the stock is overvalued in the current market environment.