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Answering a caller's query about The Procter & Gamble Company (NYSE:PG) during the lightning round of the September 10 episode of Mad Money, Jim Cramer said:

It's a tough stock. It's a tough stock because they don't have the growth that I want. They do have the 3% yield, but that's not enough. So, I'm going to say, you know, we sold it for the club. Don't look back.

The Procter & Gamble Company's (NYSE:PG) upside relies on elite operational execution and pricing power in high-margin categories. Continuous supply chain savings and an aggressive premiumization push toward items like Tide PODS help protect profitability. Combined with strong free cash flow productivity, management returned roughly $15 billion in FY 2026 through dividends and share buybacks, ensuring a steady earnings floor despite slow top-line growth.

The primary headwind is weak top-line momentum, with organic sales flat in the second quarter as challenging consumer trends, particularly in the U.S., weighed on growth. Foreign exchange friction and cost pressures further cap near-term earnings acceleration. Additionally, while the stock offers a reliable 3% dividend yield, that income profile creates a steep opportunity cost when risk-free assets and higher-growth stocks offer attractive returns. We recently discussed what Cramer thinks is the ideal valuation for a good entry point in our article, "Jim Cramer Discusses Procter & Gamble (PG) Valuation and Growth."

According to Insider Monkey's data, 83 hedge funds had a stake in The Procter & Gamble Company (NYSE:PG) in Q2 compared to 78 in the prior quarter. Short percentage of the float is 1.21%, showing its status as a defensive holding rather than a short target. While the company provides exceptional balance sheet stability and reliable cash returns for defensive portfolios, its modest top-line growth trajectory and premium valuation continue to test investor patience, validating Cramer's decision to reallocate capital toward faster-moving opportunities.

While we acknowledge the potential of PG as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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