COLGATE-PALMOLIVE CO (CPA.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:CPA - US1941621039 - Common Stock
72.42 EUR
-0.61 (-0.84%)
Overall CPA gets a fundamental rating of 5 out of 10. We evaluated CPA against 12 industry peers in the Household Products industry. While CPA belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. CPA is valued expensive and it does not seem to be growing.
1. Profitability
1.1 Basic Checks
- CPA had positive earnings in the past year.
- In the past year CPA had a positive cash flow from operations.
- CPA had positive earnings in each of the past 5 years.
- CPA had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- CPA's Return On Assets of 16.60% is amongst the best of the industry. CPA outperforms 100.00% of its industry peers.
- The Return On Equity of CPA (339.60%) is better than 100.00% of its industry peers.
- Looking at the Return On Invested Capital, with a value of 29.23%, CPA belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
- CPA had an Average Return On Invested Capital over the past 3 years of 26.58%. This is significantly above the industry average of 17.69%.
- The 3 year average ROIC (26.58%) for CPA is below the current ROIC(29.23%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.6% | ||
| ROE | 339.6% | ||
| ROIC | 29.23% |
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
- CPA's Profit Margin of 14.46% is amongst the best of the industry. CPA outperforms 83.33% of its industry peers.
- CPA's Profit Margin has been stable in the last couple of years.
- Looking at the Operating Margin, with a value of 21.44%, CPA is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
- CPA's Operating Margin has declined in the last couple of years.
- The Gross Margin of CPA (60.14%) is better than 91.67% of its industry peers.
- CPA's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 21.44% | ||
| PM (TTM) | 14.46% | ||
| GM | 60.14% |
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
- The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so CPA is creating value.
- CPA has less shares outstanding than it did 1 year ago.
- CPA has less shares outstanding than it did 5 years ago.
- Compared to 1 year ago, CPA has an improved debt to assets ratio.
2.2 Solvency
- CPA has an Altman-Z score of 6.58. This indicates that CPA is financially healthy and has little risk of bankruptcy at the moment.
- CPA has a Altman-Z score of 6.58. This is amongst the best in the industry. CPA outperforms 100.00% of its industry peers.
- The Debt to FCF ratio of CPA is 2.45, which is a good value as it means it would take CPA, 2.45 years of fcf income to pay off all of its debts.
- The Debt to FCF ratio of CPA (2.45) is comparable to the rest of the industry.
- A Debt/Equity ratio of 8.54 is on the high side and indicates that CPA has dependencies on debt financing.
- CPA's Debt to Equity ratio of 8.54 is on the low side compared to the rest of the industry. CPA is outperformed by 66.67% of its industry peers.
- Although CPA 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 | 8.54 | ||
| Debt/FCF | 2.45 | ||
| Altman-Z | 6.58 |
ROIC/WACC3.6
WACC8.12%
2.3 Liquidity
- CPA has a Current Ratio of 0.93. This is a bad value and indicates that CPA is not financially healthy enough and could expect problems in meeting its short term obligations.
- With a decent Current ratio value of 0.93, CPA is doing good in the industry, outperforming 75.00% of the companies in the same industry.
- CPA has a Quick Ratio of 0.93. This is a bad value and indicates that CPA is not financially healthy enough and could expect problems in meeting its short term obligations.
- The Quick ratio of CPA (0.60) is better than 75.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.93 | ||
| Quick Ratio | 0.6 |
3. Growth
3.1 Past
- The Earnings Per Share has been growing slightly by 2.82% over the past year.
- CPA shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 4.87% yearly.
- CPA shows a decrease in Revenue. In the last year, the revenue decreased by -0.04%.
- CPA shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.08% yearly.
EPS 1Y (TTM)2.82%
EPS 3Y3.91%
EPS 5Y4.87%
EPS Q2Q%0%
Revenue 1Y (TTM)-0.04%
Revenue growth 3Y4.89%
Revenue growth 5Y5.08%
Sales Q2Q%1.95%
3.2 Future
- Based on estimates for the next years, CPA will show a small growth in Earnings Per Share. The EPS will grow by 5.90% on average per year.
- Based on estimates for the next years, CPA will show a small growth in Revenue. The Revenue will grow by 2.66% on average per year.
EPS Next Y4.86%
EPS Next 2Y4.96%
EPS Next 3Y5.41%
EPS Next 5Y5.9%
Revenue Next Year0.65%
Revenue Next 2Y2.04%
Revenue Next 3Y2.49%
Revenue Next 5Y2.66%
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 decreasing.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 23.29, the valuation of CPA can be described as rather expensive.
- Based on the Price/Earnings ratio, CPA is valued a bit more expensive than 66.67% of the companies in the same industry.
- CPA's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.25.
- CPA is valuated rather expensively with a Price/Forward Earnings ratio of 21.50.
- Based on the Price/Forward Earnings ratio, CPA is valued a bit more expensive than 66.67% of the companies in the same industry.
- The average S&P500 Price/Forward Earnings ratio is at 25.98. CPA is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.29 | ||
| Fwd PE | 21.5 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of CPA is on the same level as its industry peers.
- 66.67% of the companies in the same industry are more expensive than CPA, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.91 | ||
| EV/EBITDA | 15.44 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- CPA has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)4.79
PEG (5Y)4.78
EPS Next 2Y4.96%
EPS Next 3Y5.41%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 2.42%, CPA has a reasonable but not impressive dividend return.
- Compared to an average industry Dividend Yield of 3.04, CPA is paying slightly less dividend.
- CPA's Dividend Yield is a higher than the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.42% |
5.2 History
- The dividend of CPA has a limited annual growth rate of 3.11%.
Dividend Growth(5Y)3.11%
Div Incr Years6
Div Non Decr Years6
5.3 Sustainability
- 62.40% of the earnings are spent on dividend by CPA. This is not a sustainable payout ratio.
- CPA's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP62.4%
EPS Next 2Y4.96%
EPS Next 3Y5.41%
COLGATE-PALMOLIVE CO / CPA.DE FAQ
What is the fundamental rating for CPA stock?
ChartMill assigns a fundamental rating of 5 / 10 to CPA.DE.
What is the valuation status for CPA stock?
ChartMill assigns a valuation rating of 3 / 10 to COLGATE-PALMOLIVE CO (CPA.DE). This can be considered as Overvalued.
How profitable is COLGATE-PALMOLIVE CO (CPA.DE) stock?
COLGATE-PALMOLIVE CO (CPA.DE) has a profitability rating of 8 / 10.
What is the valuation of COLGATE-PALMOLIVE CO based on its PE and PB ratios?
The Price/Earnings (PE) ratio for COLGATE-PALMOLIVE CO (CPA.DE) is 23.29 and the Price/Book (PB) ratio is 80.07.
Is the dividend of COLGATE-PALMOLIVE CO sustainable?
The dividend rating of COLGATE-PALMOLIVE CO (CPA.DE) is 4 / 10 and the dividend payout ratio is 62.4%.