COLGATE-PALMOLIVE CO (CPA.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:CPA - US1941621039 - Common Stock
71.43 EUR
-0.99 (-1.37%)
Overall CPA gets a fundamental rating of 5 out of 10. We evaluated CPA against 12 industry peers in the Household Products industry. CPA scores excellent on profitability, but 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.
- CPA had a positive operating cash flow in the past year.
- 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
- The Return On Assets of CPA (16.60%) is better than 100.00% of its industry peers.
- The Return On Equity of CPA (339.60%) is better than 100.00% of its industry peers.
- With an excellent Return On Invested Capital value of 29.23%, CPA belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
- Measured over the past 3 years, the Average Return On Invested Capital for CPA is significantly above the industry average of 17.69%.
- The last Return On Invested Capital (29.23%) for CPA is above the 3 year average (26.58%), which is a sign of increasing profitability.
| 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
- Looking at the Profit Margin, with a value of 14.46%, CPA belongs to the top of the industry, outperforming 83.33% of the companies in the same industry.
- CPA's Profit Margin has been stable in the last couple of years.
- The Operating Margin of CPA (21.44%) is better than 75.00% of its industry peers.
- In the last couple of years the Operating Margin of CPA has declined.
- Looking at the Gross Margin, with a value of 60.14%, CPA belongs to the top of the industry, outperforming 91.67% of the companies in the same industry.
- In the last couple of years the Gross Margin of CPA has remained more or less at the same level.
| 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
- With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), CPA is creating value.
- Compared to 1 year ago, CPA has less shares outstanding
- The number of shares outstanding for CPA has been reduced compared to 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.
- With an excellent Altman-Z score value of 6.58, CPA belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
- CPA has a debt to FCF ratio of 2.45. This is a good value and a sign of high solvency as CPA would need 2.45 years to pay back of all of its debts.
- CPA's Debt to FCF ratio of 2.45 is in line compared to the rest of the industry. CPA outperforms 58.33% of its industry peers.
- 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
- A Current Ratio of 0.93 indicates that CPA may have some problems paying its short term obligations.
- The Current ratio of CPA (0.93) is better than 75.00% of its industry peers.
- 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.
- CPA has a Quick ratio of 0.60. This is in the better half of the industry: CPA outperforms 75.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.93 | ||
| Quick Ratio | 0.6 |
3. Growth
3.1 Past
- CPA shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 2.82%.
- Measured over the past 5 years, CPA shows a small growth in Earnings Per Share. The EPS has been growing by 4.87% on average per year.
- CPA shows a decrease in Revenue. In the last year, the revenue decreased by -0.04%.
- Measured over the past years, CPA shows a small growth in Revenue. The Revenue has been growing by 5.08% on average per year.
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
- CPA is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 5.90% yearly.
- 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.
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- CPA is valuated rather expensively with a Price/Earnings ratio of 23.19.
- Based on the Price/Earnings ratio, CPA is valued a bit more expensive than the industry average as 66.67% of the companies are valued more cheaply.
- 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 21.38.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of CPA indicates a slightly more expensive valuation: CPA is more expensive than 66.67% of the companies listed 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 | 23.19 | ||
| Fwd PE | 21.38 |
4.2 Price Multiples
- CPA's Enterprise Value to EBITDA ratio is in line with the industry average.
- 75.00% 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 | 19.79 | ||
| EV/EBITDA | 15.43 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- The excellent profitability rating of CPA may justify a higher PE ratio.
PEG (NY)4.77
PEG (5Y)4.76
EPS Next 2Y4.96%
EPS Next 3Y5.41%
5. Dividend
5.1 Amount
- CPA has a Yearly Dividend Yield of 2.42%. Purely for dividend investing, there may be better candidates out there.
- CPA's Dividend Yield is slightly below the industry average, which is at 3.04.
- Compared to an average S&P500 Dividend Yield of 1.82, CPA pays a bit more dividend than the S&P500 average.
| 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
- CPA pays out 62.40% of its income as dividend. This is not a sustainable payout ratio.
- The dividend of CPA is growing, but earnings are growing more, so the dividend growth is 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 23.19 and the Price/Book (PB) ratio is 79.61.
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%.