Stock investors looking for jaw-dropping growth probably won't find it with Procter & Gamble (NYSE:PG). Even in the best of times, the consumer staples outfit slogs along at a single-digit percentage pace. Value investors won't exactly be thrilled either. P&G shares are now consistently priced at more than 20 times their trailing and projected earnings. It's not even the top dividend pick among its peers; Unilever boasts greater dividend payout growth.

Nevertheless, Procter & Gamble is a solid buy for investors looking to add some stability and reliability to their portfolio. Not only is the company a giant that's not going to be pushed around by its rivals, but P&G has also finally and fully recognized the potential of the internet as a marketing tool. And it's now doing something about it.

Woman standing in a store aisle looking at a product label.

Image source: Getty Images.

E-commerce progress for Procter & Gamble

Those who keep close tabs on P&G may question the company's place in the online world. Its plans to acquire Billie -- an online seller of women's shaving supplies -- were terminated earlier this month after the Federal Trade Commission tendered its official challenge to the deal in December.

While it's hardly a death blow to the company, it's certainly a setback for an organization with deep roots in the brick-and-mortar world. P&G's product lines include Pampers diapers, Tide detergent, and Bounty paper towels, just to name a few. Shifting any of Procter's $70 billion worth of annual revenue from offline to online is no easy feat. Indeed, some may think it's impossible, outside of acquisitions that the FTC clearly seems ready to block.

If you think Procter & Gamble isn't ready for the next era of consumerism, though, think again. Between 11% and 12% of the company's revenue for the quarter ending in October came from e-commerce sales. That's up from roughly 6% of P&G's top line a couple of years ago. It's still not enough to call it an e-commerce powerhouse, but Procter is clearly moving in the right direction.

All part of the digital plan

And there's a good reason Procter's been able to quietly cultivate this digital presence -- relatively new CEO David Taylor steered the company in this direction.

After finishing up the streamlining (through divestiture) put into motion by his predecessor Alan Lafley, in 2017 Taylor turned his focus online. That's where P&G's most alarming competition was coming from. Yes, this includes upstart brands like Dollar Shave Club and Harry's. They were a key part of the reason P&G's Gillette brand of razors saw market share whittled down from 70% of the U.S market to less than 50% of that market by 2017, according to Euromonitor.

It's not just shaving share Procter & Gamble lost, though. The explosion of direct-to-consumer shopping introduced niche brands of detergent, skincare products, and more to consumers who'd previously limited their searches to whatever they found on their nearby stores' shelves. This paradigm shift within the marketplace is a key reason P&G Ventures developed skincare brand Meladerm and bug spray Zevo, and acquired natural deodorant brand Native in 2017, which began as an online-only product.

Taylor and company aren't simply buying and bullying their way into the e-commerce arena, however. The company's been surprisingly sophisticated about its measured approach. In 2019, Taylor first began to use the term "smart audiences" as a way of describing the use of digital consumer data as a means of refining its marketing message. The company's got 350 different data-defined segmentations of more than 1 billion people. That's a lot of different ways to tailor-make marketing messages, and P&G supercharges this data by analyzing it with Alphabet's Google Cloud's artificial intelligence tools.

It doesn't take much reading between the lines to realize this consumer goods player is also a powerful technology company.

Bottom line

Consumers -- even Procter & Gamble's loyal customers -- would be hard-pressed to point to specific changes the company has made in its effort to modernize. That's the point. In the same vein, investors may struggle to identify specific strategic elements that make P&G more ready for the digitally driven future. The company we know and love today looks a lot like the Procter & Gamble we knew and loved 20 years ago, raising questions about its relevancy. As a result, it would be easy to assume the enormous and aged organization remains on the defensive -- something that crimps the bullish argument.

Take a good, close look under the hood, though, and you'll find this isn't the P&G from yesteryear. It has evolved, even if it's not touted this evolution. 

Procter & Gamble (PG) will be able to maintain slow and steady sales and earnings growth for the foreseeable future.

Data source: Thomson Reuters. Chart by author.

That doesn't necessarily mean investors should expect double-digit percentage sales and earnings growth going forward. Doing so would still be miraculous. But it does at least set the stage for potential revenue and earnings surprises in the foreseeable future. It also makes Procter & Gamble the kind of must-have name that reliability-minded investors saw in the company a couple of decades ago.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.