Will Procter & Gamble hold up post-Lafley?

Chairman A.G. Lafley to step down in January. How will company do under new leadership?

By James Dlugosch Dec 8, 2009 4:51PM

Jamie DlugoschAfter a couple of years of news dominated by corporate scoundrels, it's bittersweet to report on the retirement of A.G. Lafley at Procter & Gamble (PG). Having already relinquished the reigns of chief executive officer, Lafley will step aside completely by handing the Chairman role over to his replacement.

 

Lafley has agreed to stay on during the transition, which is fitting given his record as one of the good guys. He has had a tremendous impact on the consumer goods giant, making money for his shareholders simply by making good stuff. 

13 Dow Stocks That Are Doomed

Lafley is a bit of a dinosaur in terms of today's business executive. The man spent most of his career at Procter & Gamble, logging 32 years. When he took over as CEO in 2000, the company was struggling. There were profit warnings, and the stock was sinking in value. But by focusing on what consumers really needed, Lafley grew the company’s billion-dollar-a-year brands from 10 to today's 22.

 

His biggest move was the $57 million acquisition of Gillette. That move allowed the company to move away from traditional brands like Tide and Pampers to the growing male grooming products market.

 

Lafley also oversaw PG's sales growth overseas. Like many companies, PG moved its popular brands to markets in China and India. The strategy worked well.

 

PG had been on a steady ascent since 2000 until the downturn that came with the recession and credit crisis. The stocks has already recovered most of the ground it lost.

 

The Lafley story is about excellence, about wealth creation for shareholders by making products with real sales. Considering all of the bad news about fraud, abuse of corporate perks and other Wall Street shenanigans, it is nice to know that there are still good guys out there running companies. And a bit sad to see one go.

 

How will PG do under new leadership?

 

I suspect the company is in good hands. Growth from overseas will more than offset any difficulties domestically. In fact, the company will benefit from a falling dollar.

 

Shares pay a nice dividend of nearly 3% with a valuation that is reasonable. PG is a stock you can own almost forever and rest fairly easily in doing so.

 

At the time of this writing, Jamie Dlugosch did not own shares of PG in personal or client portfolios.

 

Related Articles:

0Comments

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

124
124 rated 1
266
266 rated 2
452
452 rated 3
702
702 rated 4
671
671 rated 5
604
604 rated 6
640
640 rated 7
495
495 rated 8
267
267 rated 9
158
158 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
AAPLAPPLE Inc10
ABBVABBVIE Inc10
ATVIACTIVISION BLIZZARD Inc10
CTSHCOGNIZANT TECHNOLOGY SOLUTIONS10
LUVSOUTHWEST AIRLINES CO.10
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.