Procter & Gamble (PG 0.54%) is increasingly leaning on price hikes to drive all of its growth. That was the main takeaway from the consumer staples company's latest earnings report, which covered the quarter ending in late December.

The owner of hit global brands like Tide detergent and Pampers diapers announced a second straight quarter of falling unit sales volumes as shoppers became more cautious in their spending.

But P&G is succeeding in its wider sales and earnings ambitions for the year and is set to send lots of cash to shareholders in fiscal 2023. Let's take a look at whether the positives outweigh the negatives for this blue chip stock.

The growth update

Zooming out to look at P&G's last six months confirms the major stresses on its business today. Organic revenue rose 5% in the fiscal second quarter to mark a modest slowdown from the prior quarter's 7% boost.

P&G also needed bigger price increases to keep that revenue figure in positive territory. Prices were up 10% compared to 9% in fiscal first quarter. CEO Jon Moeller said in a press release that P&G is doing business in a "very difficult cost and operating environment."

Yet investors should still be impressed with the bigger picture on growth. P&G is managing to pass along higher costs while keeping overall sales rising, even on top of big gains a year ago. And the company raised its 2023 sales forecast, indicating solid pricing power.

Cash and earnings

P&G is giving up some profitability as consumer demand slows and as costs spike. But its margins remain high. Operating margin shrank by less than 1 percentage point this quarter after accounting for currency exchange shifts.

Management confirmed that it expects net earnings per share to rise by about 2% at the midpoint of guidance. That 2% uptick is well below what shareholders have seen in recent years.

But the slowdown looks better considering the billions of dollars of temporary pressures added to P&G's bottom line in recent months from higher costs and the soaring value of the dollar.

Is it a buy?

The operating update contains news that supports both the bullish and the bearish theses. On the downside, P&G's growth is slow and decelerating while profit margins are falling.

Yet the positive factors outweigh these issues. The company demonstrated pricing power in the first half of fiscal 2023 and continues to win market share in attractive staples like laundry care and beauty supplies. Sales are on track to rise again this year after soaring over the last two.

Meanwhile, P&G's financial strength is becoming clearer in this tougher operating environment. Cash flow is strong, allowing the company to deliver about $15 billion to shareholders through dividend payments and stock buybacks.

That flow of direct returns isn't being jeopardized by slowing consumer spending, and that level of stability is worth having in your portfolio. Investors should see P&G as an attractive option for both growth and dividend income as it heads into the second half of its fiscal 2023.