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Analyst: P & G investments set to pay off

Fri, 09/17/2010 - 12:13pm
The Associated Press

Procter & Gamble Co.'s spending investments, starting with its acquisition of Gillette in 2006, are reaping benefits for the consumer products maker, an analyst said Friday.

THE OPINION: Jefferies & Co. analyst Douglas M. Lane said in a note to investors that P&G has also invested in developing new products, which is also helping results. P&G's return on invested capital should show "meaningful improvement over the next couple of years after barely earning its cost of capital in the years following the Gilette acquisition in early 2006," Lane wrote.

P&G's $27 billion developing markets business is also a positive, since many of the areas have more room to grow than developed markets, Lane said.

The analyst also touted the company's dividend as well as its share repurchases.

THE STOCK: Shares fell 15 cents to $60.96 during afternoon trading. Over the past year the stock has traded between $39.37 and $64.58.

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