COLGATE-PALMOLIVE CO (CL) Stock Fundamental Analysis
NYSE:CL - New York Stock Exchange, Inc. - US1941621039 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to CL. CL was compared to 12 industry peers in the Household Products industry. CL scores excellent points on both the profitability and health parts. This is a solid base for a good stock. CL is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
CL had positive earnings in the past year.
In the past year CL had a positive cash flow from operations.
CL had positive earnings in each of the past 5 years.
In the past 5 years CL always reported a positive cash flow from operatings.
1.2 Ratios
CL has a better Return On Assets (18.01%) than 100.00% of its industry peers.
With an excellent Return On Equity value of 1363.21%, CL belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
CL has a better Return On Invested Capital (31.44%) than 100.00% of its industry peers.
CL had an Average Return On Invested Capital over the past 3 years of 26.58%. This is significantly above the industry average of 15.69%.
The 3 year average ROIC (26.58%) for CL is below the current ROIC(31.44%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 18.01% | ||
| ROE | 1363.21% | ||
| ROIC | 31.44% |
ROA(3y)14.46%
ROA(5y)14.94%
ROE(3y)728.51%
ROE(5y)580.79%
ROIC(3y)26.58%
ROIC(5y)26.1%
1.3 Margins
CL has a better Profit Margin (14.38%) than 91.67% of its industry peers.
In the last couple of years the Profit Margin of CL has remained more or less at the same level.
CL has a better Operating Margin (21.55%) than 91.67% of its industry peers.
CL's Operating Margin has declined in the last couple of years.
The Gross Margin of CL (60.50%) is better than 100.00% of its industry peers.
In the last couple of years the Gross Margin of CL has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 21.55% | ||
| PM (TTM) | 14.38% | ||
| GM | 60.5% |
OM growth 3Y-1.21%
OM growth 5Y-1.94%
PM growth 3Y4.95%
PM growth 5Y-0.96%
GM growth 3Y0.53%
GM growth 5Y0.34%
2. Health
2.1 Basic Checks
CL has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, CL has less shares outstanding
The number of shares outstanding for CL has been reduced compared to 5 years ago.
Compared to 1 year ago, CL has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 7.11 indicates that CL is not in any danger for bankruptcy at the moment.
CL has a better Altman-Z score (7.11) than 91.67% of its industry peers.
The Debt to FCF ratio of CL is 2.24, which is a good value as it means it would take CL, 2.24 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.24, CL belongs to the top of the industry, outperforming 83.33% of the companies in the same industry.
CL has a Debt/Equity ratio of 34.42. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 34.42, CL is not doing good in the industry: 83.33% of the companies in the same industry are doing better.
Although CL does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 34.42 | ||
| Debt/FCF | 2.24 | ||
| Altman-Z | 7.11 |
ROIC/WACC3.7
WACC8.49%
2.3 Liquidity
CL has a Current Ratio of 0.92. This is a bad value and indicates that CL is not financially healthy enough and could expect problems in meeting its short term obligations.
CL has a Current ratio of 0.92. This is in the lower half of the industry: CL underperforms 75.00% of its industry peers.
CL has a Quick Ratio of 0.92. This is a bad value and indicates that CL is not financially healthy enough and could expect problems in meeting its short term obligations.
CL has a Quick ratio of 0.58. This is in the lower half of the industry: CL underperforms 75.00% of its industry peers.
CL does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.92 | ||
| Quick Ratio | 0.58 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 11.15% over the past year.
Measured over the past 5 years, CL shows a small growth in Earnings Per Share. The EPS has been growing by 4.87% on average per year.
The Revenue has been growing slightly by 3.31% in the past year.
The Revenue has been growing slightly by 5.08% on average over the past years.
EPS 1Y (TTM)11.15%
EPS 3Y3.91%
EPS 5Y4.87%
EPS Q2Q%4.6%
Revenue 1Y (TTM)3.31%
Revenue growth 3Y4.89%
Revenue growth 5Y5.08%
Sales Q2Q%-0.12%
3.2 Future
Based on estimates for the next years, CL will show a small growth in Earnings Per Share. The EPS will grow by 7.78% on average per year.
CL is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.33% yearly.
EPS Next Y6.46%
EPS Next 2Y7.3%
EPS Next 3Y7.49%
EPS Next 5Y7.78%
Revenue Next Year0.05%
Revenue Next 2Y1.97%
Revenue Next 3Y2.69%
Revenue Next 5Y4.33%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
CL is valuated rather expensively with a Price/Earnings ratio of 24.92.
Based on the Price/Earnings ratio, CL is valued a bit more expensive than 66.67% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 29.63, CL is valued at the same level.
Based on the Price/Forward Earnings ratio of 23.41, the valuation of CL can be described as rather expensive.
Based on the Price/Forward Earnings ratio, CL is valued a bit more expensive than the industry average as 66.67% of the companies are valued more cheaply.
When comparing the Price/Forward Earnings ratio of CL to the average of the S&P500 Index (22.68), we can say CL is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.92 | ||
| Fwd PE | 23.41 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of CL is on the same level as its industry peers.
CL's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.61 | ||
| EV/EBITDA | 15.86 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates CL does not grow enough to justify the current Price/Earnings ratio.
CL has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)3.86
PEG (5Y)5.11
EPS Next 2Y7.3%
EPS Next 3Y7.49%
5. Dividend
5.1 Amount
CL has a Yearly Dividend Yield of 2.28%.
Compared to an average industry Dividend Yield of 2.57, CL has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.29, CL has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.28% |
5.2 History
The dividend of CL has a limited annual growth rate of 3.05%.
CL has paid a dividend for at least 10 years, which is a reliable track record.
CL has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)3.05%
Div Incr Years34
Div Non Decr Years34
5.3 Sustainability
CL pays out 61.90% of its income as dividend. This is not a sustainable payout ratio.
CL's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP61.9%
EPS Next 2Y7.3%
EPS Next 3Y7.49%
89.47
+1.6 (+1.82%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupHousehold & Personal Products
GICS IndustryHousehold Products
Earnings (Last)
Earnings (Next)
Inst Owners84.67%
Inst Owner Change0.27%
Ins Owners0.05%
Ins Owner Change-0.06%
Market Cap73.10B
Analysts74.38
Price Target102.93 (15.04%)
Short Float %1.17%
Short Ratio2.02
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.28% |
Yearly Dividend2.18
Dividend Growth(5Y)3.05%
DP61.9%
Div Incr Years34
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-0.53%
Min EPS beat(2)-0.87%
Max EPS beat(2)-0.19%
EPS beat(4)2
Avg EPS beat(4)0.87%
Min EPS beat(4)-0.87%
Max EPS beat(4)2.78%
EPS beat(8)5
Avg EPS beat(8)1.03%
EPS beat(12)5
Avg EPS beat(12)-0.05%
EPS beat(16)5
Avg EPS beat(16)-0.54%
Revenue beat(2)0
Avg Revenue beat(2)-2.88%
Min Revenue beat(2)-3.46%
Max Revenue beat(2)-2.31%
Revenue beat(4)0
Avg Revenue beat(4)-2.13%
Min Revenue beat(4)-3.46%
Max Revenue beat(4)-0.78%
Revenue beat(8)1
Avg Revenue beat(8)-1.31%
Revenue beat(12)2
Avg Revenue beat(12)-1.54%
Revenue beat(16)2
Avg Revenue beat(16)-1.72%
PT rev (1m)-3.9%
PT rev (3m)-6.34%
EPS NQ rev (1m)-5.32%
EPS NQ rev (3m)-3.59%
EPS NY rev (1m)-3.73%
EPS NY rev (3m)-3.93%
Revenue NQ rev (1m)-4.18%
Revenue NQ rev (3m)-5.58%
Revenue NY rev (1m)-2.82%
Revenue NY rev (3m)-3.27%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.92 | ||
| Fwd PE | 23.41 | ||
| P/S | 3.64 | ||
| P/FCF | 20.61 | ||
| P/OCF | 17.8 | ||
| P/B | 344.8 | ||
| P/tB | N/A | ||
| EV/EBITDA | 15.86 |
EPS(TTM)3.59
EY4.01%
EPS(NY)3.82
Fwd EY4.27%
FCF(TTM)4.34
FCFY4.85%
OCF(TTM)5.03
OCFY5.62%
SpS24.6
BVpS0.26
TBVpS-5.89
PEG (NY)3.86
PEG (5Y)5.11
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 18.01% | ||
| ROE | 1363.21% | ||
| ROCE | 42.11% | ||
| ROIC | 31.44% | ||
| ROICexc | 35.81% | ||
| ROICexgc | 80.7% | ||
| OM | 21.55% | ||
| PM (TTM) | 14.38% | ||
| GM | 60.5% | ||
| FCFM | 17.64% |
ROA(3y)14.46%
ROA(5y)14.94%
ROE(3y)728.51%
ROE(5y)580.79%
ROIC(3y)26.58%
ROIC(5y)26.1%
ROICexc(3y)29.6%
ROICexc(5y)28.78%
ROICexgc(3y)61.47%
ROICexgc(5y)63.97%
ROCE(3y)35.89%
ROCE(5y)35.3%
ROICexcg growth 3Y6.99%
ROICexcg growth 5Y3.87%
ROICexc growth 3Y7.74%
ROICexc growth 5Y5.87%
OM growth 3Y-1.21%
OM growth 5Y-1.94%
PM growth 3Y4.95%
PM growth 5Y-0.96%
GM growth 3Y0.53%
GM growth 5Y0.34%
F-Score8
Asset Turnover1.25
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 34.42 | ||
| Debt/FCF | 2.24 | ||
| Debt/EBITDA | 1.48 | ||
| Cap/Depr | 92.73% | ||
| Cap/Sales | 2.79% | ||
| Interest Coverage | 14.34 | ||
| Cash Conversion | 83.19% | ||
| Profit Quality | 122.7% | ||
| Current Ratio | 0.92 | ||
| Quick Ratio | 0.58 | ||
| Altman-Z | 7.11 |
F-Score8
WACC8.49%
ROIC/WACC3.7
Cap/Depr(3y)114.92%
Cap/Depr(5y)104.56%
Cap/Sales(3y)3.43%
Cap/Sales(5y)3.21%
Profit Quality(3y)119.71%
Profit Quality(5y)121.85%
High Growth Momentum
Growth
EPS 1Y (TTM)11.15%
EPS 3Y3.91%
EPS 5Y4.87%
EPS Q2Q%4.6%
EPS Next Y6.46%
EPS Next 2Y7.3%
EPS Next 3Y7.49%
EPS Next 5Y7.78%
Revenue 1Y (TTM)3.31%
Revenue growth 3Y4.89%
Revenue growth 5Y5.08%
Sales Q2Q%-0.12%
Revenue Next Year0.05%
Revenue Next 2Y1.97%
Revenue Next 3Y2.69%
Revenue Next 5Y4.33%
EBIT growth 1Y7.36%
EBIT growth 3Y3.62%
EBIT growth 5Y3.04%
EBIT Next Year16.03%
EBIT Next 3Y9.33%
EBIT Next 5Y8.82%
FCF growth 1Y16.64%
FCF growth 3Y8.74%
FCF growth 5Y4.85%
OCF growth 1Y9.67%
OCF growth 3Y7.29%
OCF growth 5Y5.56%