PROCTER & GAMBLE CO. $77 (New York symbol PG; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 2.7 billion; Market cap: $207.9 billion; Price-to-sales ratio: 2.5; Dividend yield: 2.9%; TSINetwork Rating: Above Average; www.pg.com) is one of the world’s largest makers of household and personal-care products. Its top brands include Tide detergent, Crest toothpaste, Head & Shoulders shampoo and Pampers diapers.

The company faces rising competition from generic brands. Last year, it responded with a major restructuring plan, which mainly involves cutting 5% of its workforce and closing plants.

The company expects severance and other costs to total $3.5 billion over the next five years. However, these moves should cut its costs by $10 billion over the same period.

In its fiscal 2013 second quarter, which ended December 31, 2012, Procter’s earnings jumped 140.0%, to $4.1 billion, or $1.39 a share. A year earlier, it earned $1.7 billion, or $0.56 a share. If you disregard restructuring costs and other one-time items, earnings per share rose 11.9%, to $1.22 from $1.09.

The savings are also letting Procter cut its prices to compete with generic brands. But even with the lower prices, Procter’s sales rose 2.0% in the quarter, to $22.2 billion from $21.7 billion. Overseas markets supply two-thirds of Procter’s sales, and the high U.S. dollar hurts their contribution. Without the negative impact of exchange rates, sales rose 3.0%.

Procter’s balance sheet remains sound. Its long-term debt of $23.6 billion is a low 11% of its market cap. It also holds cash of $6.6 billion, or $2.43 a share.

The stock is up 19% in the past year and now trades at 19.3 times the $3.99 a share that the company will probably earn in fiscal 2013. That’s a high p/e ratio, but it’s still reasonable in light of Procter’s improving profitability and well-known brands. The company’s rising earnings should also let it raise its $2.25-a-share dividend, which yields 2.9%.

Procter & Gamble is a buy.