GSK PLC-SPON ADR (GSK) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:GSK - US37733W2044 - ADR
49.15 USD
+0.5 (+1.03%)
49.15 USD
0 (0%)
Overall GSK gets a fundamental rating of 6 out of 10. We evaluated GSK against 190 industry peers in the Pharmaceuticals industry. While GSK has a great profitability rating, there are some minor concerns on its financial health. A decent growth rate in combination with a cheap valuation! Better keep an eye on GSK.
1. Profitability
1.1 Basic Checks
- In the past year GSK was profitable.
- GSK had a positive operating cash flow in the past year.
- GSK had positive earnings in each of the past 5 years.
- Each year in the past 5 years GSK had a positive operating cash flow.
1.2 Ratios
- GSK has a Return On Assets of 8.96%. This is amongst the best in the industry. GSK outperforms 91.10% of its industry peers.
- GSK has a Return On Equity of 34.02%. This is amongst the best in the industry. GSK outperforms 95.29% of its industry peers.
- GSK has a Return On Invested Capital of 18.16%. This is amongst the best in the industry. GSK outperforms 95.29% of its industry peers.
- GSK had an Average Return On Invested Capital over the past 3 years of 18.38%. This is significantly above the industry average of 12.83%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.96% | ||
| ROE | 34.02% | ||
| ROIC | 18.16% |
ROA(3y)12.52%
ROA(5y)10.05%
ROE(3y)65.63%
ROE(5y)53.08%
ROIC(3y)18.38%
ROIC(5y)14.53%
1.3 Margins
- With an excellent Profit Margin value of 17.08%, GSK belongs to the best of the industry, outperforming 89.53% of the companies in the same industry.
- GSK's Profit Margin has declined in the last couple of years.
- GSK has a Operating Margin of 26.20%. This is amongst the best in the industry. GSK outperforms 92.15% of its industry peers.
- GSK's Operating Margin has been stable in the last couple of years.
- GSK has a Gross Margin of 72.52%. This is amongst the best in the industry. GSK outperforms 80.10% of its industry peers.
- GSK's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 26.2% | ||
| PM (TTM) | 17.08% | ||
| GM | 72.52% |
OM growth 3Y3.67%
OM growth 5Y-0.3%
PM growth 3Y-22.68%
PM growth 5Y-9.82%
GM growth 3Y2.09%
GM growth 5Y0.57%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so GSK is creating value.
- GSK has more shares outstanding than it did 1 year ago.
- The number of shares outstanding for GSK has been increased compared to 5 years ago.
- The debt/assets ratio for GSK has been reduced compared to a year ago.
2.2 Solvency
- An Altman-Z score of 2.14 indicates that GSK is not a great score, but indicates only limited risk for bankruptcy at the moment.
- GSK has a Altman-Z score of 2.14. This is comparable to the rest of the industry: GSK outperforms 58.12% of its industry peers.
- The Debt to FCF ratio of GSK is 3.78, which is a good value as it means it would take GSK, 3.78 years of fcf income to pay off all of its debts.
- GSK has a Debt to FCF ratio of 3.78. This is amongst the best in the industry. GSK outperforms 86.91% of its industry peers.
- A Debt/Equity ratio of 0.92 indicates that GSK is somewhat dependend on debt financing.
- GSK has a Debt to Equity ratio of 0.92. This is in the lower half of the industry: GSK underperforms 72.77% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.92 | ||
| Debt/FCF | 3.78 | ||
| Altman-Z | 2.14 |
ROIC/WACC2.12
WACC8.55%
2.3 Liquidity
- GSK has a Current Ratio of 0.84. This is a bad value and indicates that GSK is not financially healthy enough and could expect problems in meeting its short term obligations.
- With a Current ratio value of 0.84, GSK is not doing good in the industry: 87.96% of the companies in the same industry are doing better.
- A Quick Ratio of 0.55 indicates that GSK may have some problems paying its short term obligations.
- With a Quick ratio value of 0.55, GSK is not doing good in the industry: 88.48% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.84 | ||
| Quick Ratio | 0.55 |
3. Growth
3.1 Past
- GSK shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 2.73%.
- Measured over the past 5 years, GSK shows a small growth in Earnings Per Share. The EPS has been growing by 0.56% on average per year.
- The Revenue has been growing slightly by 2.73% in the past year.
- Measured over the past years, GSK shows a decrease in Revenue. The Revenue has been decreasing by -1.45% on average per year.
EPS 1Y (TTM)2.73%
EPS 3Y4.05%
EPS 5Y0.56%
EPS Q2Q%10.66%
Revenue 1Y (TTM)2.73%
Revenue growth 3Y8.31%
Revenue growth 5Y-1.45%
Sales Q2Q%6.68%
3.2 Future
- GSK is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.25% yearly.
- GSK is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.96% yearly.
EPS Next Y8.35%
EPS Next 2Y8.33%
EPS Next 3Y8.41%
EPS Next 5Y7.25%
Revenue Next Year4.28%
Revenue Next 2Y4.69%
Revenue Next 3Y4.66%
Revenue Next 5Y3.96%
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 accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 10.52, the valuation of GSK can be described as reasonable.
- Based on the Price/Earnings ratio, GSK is valued cheaply inside the industry as 90.05% of the companies are valued more expensively.
- GSK's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.21.
- A Price/Forward Earnings ratio of 9.55 indicates a reasonable valuation of GSK.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of GSK indicates a rather cheap valuation: GSK is cheaper than 87.43% of the companies listed in the same industry.
- When comparing the Price/Forward Earnings ratio of GSK to the average of the S&P500 Index (25.98), we can say GSK is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.52 | ||
| Fwd PE | 9.55 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, GSK is valued cheaply inside the industry as 90.58% of the companies are valued more expensively.
- Based on the Price/Free Cash Flow ratio, GSK is valued cheaply inside the industry as 86.91% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.6 | ||
| EV/EBITDA | 7.33 |
4.3 Compensation for Growth
- The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
- The excellent profitability rating of GSK may justify a higher PE ratio.
PEG (NY)1.26
PEG (5Y)18.75
EPS Next 2Y8.33%
EPS Next 3Y8.41%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 3.55%, GSK has a reasonable but not impressive dividend return.
- Compared to an average industry Dividend Yield of 0.46, GSK pays a better dividend. On top of this GSK pays more dividend than 95.81% of the companies listed in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.81, GSK pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.55% |
5.2 History
- The dividend of GSK decreases each year by -9.84%.
- GSK has paid a dividend for at least 10 years, which is a reliable track record.
- The dividend of GSK decreased recently.
Dividend Growth(5Y)-9.84%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
- 46.05% of the earnings are spent on dividend by GSK. This is a bit on the high side, but may be sustainable.
DP46.05%
EPS Next 2Y8.33%
EPS Next 3Y8.41%
GSK PLC-SPON ADR / GSK FAQ
Can you provide the ChartMill fundamental rating for GSK PLC-SPON ADR?
ChartMill assigns a fundamental rating of 6 / 10 to GSK.
What is the valuation status of GSK PLC-SPON ADR (GSK) stock?
ChartMill assigns a valuation rating of 8 / 10 to GSK PLC-SPON ADR (GSK). This can be considered as Undervalued.
How profitable is GSK PLC-SPON ADR (GSK) stock?
GSK PLC-SPON ADR (GSK) has a profitability rating of 8 / 10.
What is the financial health of GSK PLC-SPON ADR (GSK) stock?
The financial health rating of GSK PLC-SPON ADR (GSK) is 4 / 10.
What is the earnings growth outlook for GSK PLC-SPON ADR?
The Earnings per Share (EPS) of GSK PLC-SPON ADR (GSK) is expected to grow by 8.35% in the next year.