In the dynamic world of consumer goods, a few names command as much global recognition and market influence as The Procter & Gamble Company PG and Colgate-Palmolive Company CL. Both companies operate within the consumer-packaged goods (CPG) industry, catering to everyday needs through a wide array of personal care, hygiene and household products.
Procter & Gamble is a multi-national giant with a broad portfolio ranging from diapers to detergents. Colgate is a global leader in oral care and personal hygiene. Both companies have long been rivals vying for market share, brand loyalty and innovation leadership.
This face-off delves into their business models, financial performance and strategic priorities to uncover what sets these CPG titans apart and where their paths converge. Let us take a closer look.
Procter & Gamble: Steady in the Storm, Focused on the Future
PG stands as one of the most stable and resilient investment opportunities within the global consumer goods sector, backed by a massive international presence and an enviable portfolio of household brands. Operating in more than 180 countries and boasting a market capitalization close to $400 billion, Procter & Gamble is more than a familiar name; it is a global institution. Its expansive product lineup spans from cleaning essentials to personal care, anchored by iconic names such as Tide, Pampers, Gillette and Olay. This scale and distribution depth give the company a built-in competitive moat, enabling it to lead across multiple categories while fending off both local and global rivals.
In third-quarter fiscal 2025, Procter & Gamble once again demonstrated its ability to navigate uncertainty, delivering earnings per share of $1.54, matching analyst expectations despite facing macroeconomic turbulence and retail channel volatility, especially in the United States and Europe. Impressively, the company maintained or grew market share in seven of its 10 core categories, and held or expanded its presence in 27 of its top 50 category-country combinations. Even as consumer demand softened and trade inventories adjusted downward, PG’s brands remained the preferred choice — an endorsement of its product quality, consistency and perceived value.
The backbone of PG’s investment case is its unwavering commitment to premiumization, innovation and long-term brand building. The company is executing a strong product innovation strategy that spans all pricing tiers, including high-performance launches like Crest 3D White Deep Stain Remover, Tide EVO in recyclable packaging and the latest Oral-B electric toothbrushes. Rather than resorting to discount-driven promotions, P&G continues to support these innovations with robust advertising and demand creation investments, reinforcing its commitment to brand strength over short-term sales spikes. These initiatives, coupled with productivity gains that delivered 280 basis points in savings last quarter, provide a solid foundation for margin expansion and reinvestment.
Yet, Procter & Gamble is not without its challenges. The company is navigating a complex macro environment, marked by inflationary pressures, rising input costs, shifting consumer habits and geopolitical tensions. In fiscal 2025, it expects after-tax headwinds of approximately $200 million each from commodity costs and foreign exchange, totaling a 16-cent drag on EPS. Additionally, tariff-related costs are projected to reach $1-$1.5 billion annually.
Despite these hurdles, PG’s disciplined capital allocation, aiming to return $16-17 billion to shareholders this year through dividends and buybacks, underscores its commitment to long-term value creation and its ability to thrive even in a turbulent global landscape.
Colgate: Category Leader With Focused Resilience
CL stands as a focused powerhouse in the consumer goods landscape, commanding impressive global leadership in oral care while expanding its footprint in high-potential segments like pet nutrition and skin health. Colgate’s strategy is laser-focused. It dominates in categories wherein performance drives consumer choice and builds scale in complementary areas.
With operations in more than 200 countries, the company holds an industry-leading 41% share of the global toothpaste market and 32% in manual toothbrushes, making it the clear front-runner in oral care. This deep category focus, coupled with strategic investments in Hill’s Pet Nutrition and premium skincare brands like EltaMD and PCA Skin, is enabling Colgate to diversify its revenue streams while strengthening its presence in high-growth, high-margin segments. The company also continues to ramp up digital initiatives, streamline manufacturing and maintain tight cost control to support reinvestment in innovation and marketing, especially in faster-growing international markets, wherein it sees long-term potential.
The company has shown its ability to weather macroeconomic uncertainty, with first-quarter 2025 sales of more than $4.91 billion beating the Zacks Consensus Estimate despite a 3% year-over-year decline, and an EPS of 91 cents beating estimates.
Colgate’s ability to adapt to a volatile macro environment is also evident in its well-structured mitigation strategy against rising tariffs. CL expects $200 million in incremental tariff impacts in 2025 but is offsetting these headwinds through supply-chain flexibility, productivity gains and revenue growth management. The company has invested $2 billion in U.S. supply-chain upgrades in the past five years, reducing exposure to China and increasing domestic manufacturing.
Additionally, its advertising ROI focus and use of AI-driven analytics allow Colgate to optimize spend without compromising innovation or premiumization. The exit from private-label pet food will weigh slightly on volume, but the Hill’s brand continues to gain share and margin — a testament to Colgate’s disciplined portfolio strategy.
From a shareholder perspective, CL offers a compelling balance of category dominance, operational efficiency and consistent returns. Despite short-term pressures, management reaffirmed its ability to sustain investment, drive innovation and protect margins.
How Do Estimates Compare for PG & CL?
The Zacks Consensus Estimate for Procter & Gamble’s fiscal 2025 sales and EPS implies year-over-year growth of 0.4% and 3%, respectively. EPS estimates have moved down 1.2% in the past seven days.
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The Zacks Consensus Estimate for Colgate’s 2025 sales and EPS suggests year-over-year growth of 0.6% and 1.4%, respectively. EPS estimates have moved down 0.5% in the past seven days.
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This clearly illustrates that both PG and CL have witnessed downward estimate revisions in the past seven days. However, Colgate’s estimates indicate a lesser magnitude of declines compared with PG.
Price Performance & Valuation of Procter & Gamble & Colgate
Year to date, PG shares have declined 3.1%, whereas CL stock has gained 1.4%.
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Procter & Gamble is trading at a forward 12-month price-to-earnings multiple of 23.06X, below its median of 23.65X in the last five years. Colgate’s forward 12-month P/E multiple sits at 24.47X, above its median of 24.1X in the last five years.
The PG stock looks cheap from a valuation perspective. However, Procter & Gamble’s discounted valuation may be linked to the ongoing headwinds and soft outlook, along with its dismal share performance.
Colgate does seem pricey. However, its valuations reflect its solid balance sheet, robust brand equity and a clear strategy centered on long-term growth. If the company sustains its execution, the premium could be warranted.
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Conclusion
Procter & Gamble’s extensive global footprint and well-diversified brand portfolio provide a solid foundation for long-term revenue stability. However, ongoing geopolitical tensions, currency fluctuations and market-specific challenges, particularly in Greater China, pose notable headwinds.
With a solid balance sheet, robust brand equity and a clear strategy centered on long-term growth, Colgate remains an attractive choice for investors seeking a focused, high-margin consumer goods company. As the company looks to stabilize in the second half of 2025, its strategic agility and disciplined execution position it well to deliver sustainable shareholder value amid near-term volatility.
Colgate’s brand equity, solid balance sheet and adaptability give it an edge over Procter & Gamble. With lower tariff risks and solid fundamentals, it stands out as a compelling investment option.
Colgate currently carries a Zacks Rank #3 (Hold), while PG has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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