GSK PLC-SPON ADR (GSK) Stock Fundamental Analysis
NYSE:GSK - New York Stock Exchange, Inc. - US37733W2044 - ADR - Currency: USD
GSK gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 195 industry peers in the Pharmaceuticals industry. GSK scores excellent on profitability, but there are concerns on its financial health. GSK is cheap, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
GSK had positive earnings in the past year.
In the past year GSK had a positive cash flow from operations.
Each year in the past 5 years GSK has been profitable.
In the past 5 years GSK always reported a positive cash flow from operatings.
1.2 Ratios
GSK's Return On Assets of 5.19% is amongst the best of the industry. GSK outperforms 88.72% of its industry peers.
The Return On Equity of GSK (22.27%) is better than 94.36% of its industry peers.
With an excellent Return On Invested Capital value of 17.01%, GSK belongs to the best of the industry, outperforming 93.85% of the companies in the same industry.
GSK had an Average Return On Invested Capital over the past 3 years of 18.38%. This is above the industry average of 14.87%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.19% | ||
| ROE | 22.27% | ||
| ROIC | 17.01% |
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
GSK has a better Profit Margin (10.00%) than 87.18% of its industry peers.
GSK's Profit Margin has declined in the last couple of years.
With an excellent Operating Margin value of 24.96%, GSK belongs to the best of the industry, outperforming 90.77% of the companies in the same industry.
In the last couple of years the Operating Margin of GSK has remained more or less at the same level.
GSK's Gross Margin of 72.01% is amongst the best of the industry. GSK outperforms 81.03% of its industry peers.
In the last couple of years the Gross Margin of GSK has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 24.96% | ||
| PM (TTM) | 10% | ||
| GM | 72.01% |
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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), GSK is creating value.
The number of shares outstanding for GSK has been increased compared to 1 year ago.
GSK has more shares outstanding than it did 5 years ago.
GSK has a better debt/assets ratio than last year.
2.2 Solvency
GSK has an Altman-Z score of 1.84. This is not the best score and indicates that GSK is in the grey zone with still only limited risk for bankruptcy at the moment.
GSK has a Altman-Z score of 1.84. This is in the better half of the industry: GSK outperforms 65.13% of its industry peers.
GSK has a debt to FCF ratio of 4.76. This is a neutral value as GSK would need 4.76 years to pay back of all of its debts.
With an excellent Debt to FCF ratio value of 4.76, GSK belongs to the best of the industry, outperforming 84.62% of the companies in the same industry.
GSK has a Debt/Equity ratio of 1.16. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of GSK (1.16) is worse than 73.33% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.16 | ||
| Debt/FCF | 4.76 | ||
| Altman-Z | 1.84 |
ROIC/WACC2.1
WACC8.11%
2.3 Liquidity
A Current Ratio of 0.87 indicates that GSK may have some problems paying its short term obligations.
GSK has a Current ratio of 0.87. This is amonst the worse of the industry: GSK underperforms 87.18% of its industry peers.
GSK has a Quick Ratio of 0.87. 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 Quick ratio value of 0.58, GSK is not doing good in the industry: 88.72% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.87 | ||
| Quick Ratio | 0.58 |
3. Growth
3.1 Past
The earnings per share for GSK have decreased by 0.00% in the last year.
GSK shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 0.56% yearly.
Looking at the last year, GSK shows a small growth in Revenue. The Revenue has grown by 2.57% in the last 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)0%
EPS 3Y4.05%
EPS 5Y0.56%
EPS Q2Q%4.18%
Revenue 1Y (TTM)2.57%
Revenue growth 3Y8.31%
Revenue growth 5Y-1.45%
Sales Q2Q%2.08%
3.2 Future
GSK is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.00% yearly.
GSK is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.79% yearly.
EPS Next Y8.58%
EPS Next 2Y9.75%
EPS Next 3Y8.7%
EPS Next 5Y7%
Revenue Next Year4.28%
Revenue Next 2Y4.85%
Revenue Next 3Y4.59%
Revenue Next 5Y3.79%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 8.50, the valuation of GSK can be described as very reasonable.
GSK's Price/Earnings ratio is rather cheap when compared to the industry. GSK is cheaper than 92.82% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.45, GSK is valued rather cheaply.
GSK is valuated cheaply with a Price/Forward Earnings ratio of 7.13.
Based on the Price/Forward Earnings ratio, GSK is valued cheaper than 89.74% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.90, GSK is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.5 | ||
| Fwd PE | 7.13 |
4.2 Price Multiples
92.31% of the companies in the same industry are more expensive than GSK, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, GSK is valued cheaper than 87.18% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 14.63 | ||
| EV/EBITDA | 6.36 |
4.3 Compensation for Growth
GSK's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
GSK has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)0.99
PEG (5Y)15.15
EPS Next 2Y9.75%
EPS Next 3Y8.7%
5. Dividend
5.1 Amount
GSK has a Yearly Dividend Yield of 4.45%, which is a nice return.
GSK's Dividend Yield is rather good when compared to the industry average which is at 4.12. GSK pays more dividend than 95.90% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.42, GSK pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.45% |
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
GSK pays out 78.91% of its income as dividend. This is not a sustainable payout ratio.
DP78.91%
EPS Next 2Y9.75%
EPS Next 3Y8.7%
38.18
-0.33 (-0.86%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners39.99%
Inst Owner Change-6.9%
Ins Owners0.16%
Ins Owner ChangeN/A
Market Cap77.24B
Analysts56.13
Price Target44.51 (16.58%)
Short Float %0.83%
Short Ratio3.18
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.45% |
Yearly Dividend1.66
Dividend Growth(5Y)-9.84%
DP78.91%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)14.16%
Min EPS beat(2)9.85%
Max EPS beat(2)18.46%
EPS beat(4)4
Avg EPS beat(4)12.59%
Min EPS beat(4)9.85%
Max EPS beat(4)18.46%
EPS beat(8)7
Avg EPS beat(8)9.54%
EPS beat(12)11
Avg EPS beat(12)10.79%
EPS beat(16)15
Avg EPS beat(16)12.11%
Revenue beat(2)1
Avg Revenue beat(2)0.04%
Min Revenue beat(2)-1.6%
Max Revenue beat(2)1.68%
Revenue beat(4)2
Avg Revenue beat(4)-0.23%
Min Revenue beat(4)-3.45%
Max Revenue beat(4)2.46%
Revenue beat(8)6
Avg Revenue beat(8)1.47%
Revenue beat(12)9
Avg Revenue beat(12)1.76%
Revenue beat(16)9
Avg Revenue beat(16)-5.01%
PT rev (1m)-1.05%
PT rev (3m)0.33%
EPS NQ rev (1m)0.1%
EPS NQ rev (3m)-1.66%
EPS NY rev (1m)0.1%
EPS NY rev (3m)-0.88%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.8%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.84%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.5 | ||
| Fwd PE | 7.13 | ||
| P/S | 1.8 | ||
| P/FCF | 14.63 | ||
| P/OCF | 8.41 | ||
| P/B | 4 | ||
| P/tB | N/A | ||
| EV/EBITDA | 6.36 |
EPS(TTM)4.49
EY11.76%
EPS(NY)5.35
Fwd EY14.02%
FCF(TTM)2.61
FCFY6.84%
OCF(TTM)4.54
OCFY11.9%
SpS21.24
BVpS9.54
TBVpS-6.08
PEG (NY)0.99
PEG (5Y)15.15
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.19% | ||
| ROE | 22.27% | ||
| ROCE | 19.73% | ||
| ROIC | 17.01% | ||
| ROICexc | 19.17% | ||
| ROICexgc | 55.58% | ||
| OM | 24.96% | ||
| PM (TTM) | 10% | ||
| GM | 72.01% | ||
| FCFM | 12.29% |
ROA(3y)12.52%
ROA(5y)10.05%
ROE(3y)65.63%
ROE(5y)53.08%
ROIC(3y)18.38%
ROIC(5y)14.53%
ROICexc(3y)22.56%
ROICexc(5y)17.82%
ROICexgc(3y)78.4%
ROICexgc(5y)77.5%
ROCE(3y)21.97%
ROCE(5y)17.32%
ROICexcg growth 3Y-7.02%
ROICexcg growth 5Y-6.42%
ROICexc growth 3Y24.64%
ROICexc growth 5Y6.13%
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%
F-Score5
Asset Turnover0.52
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.16 | ||
| Debt/FCF | 4.76 | ||
| Debt/EBITDA | 1.48 | ||
| Cap/Depr | 88.68% | ||
| Cap/Sales | 9.09% | ||
| Interest Coverage | 12.49 | ||
| Cash Conversion | 60.72% | ||
| Profit Quality | 122.87% | ||
| Current Ratio | 0.87 | ||
| Quick Ratio | 0.58 | ||
| Altman-Z | 1.84 |
F-Score5
WACC8.11%
ROIC/WACC2.1
Cap/Depr(3y)108.08%
Cap/Depr(5y)108.56%
Cap/Sales(3y)8.31%
Cap/Sales(5y)9.2%
Profit Quality(3y)87.63%
Profit Quality(5y)97.06%
High Growth Momentum
Growth
EPS 1Y (TTM)0%
EPS 3Y4.05%
EPS 5Y0.56%
EPS Q2Q%4.18%
EPS Next Y8.58%
EPS Next 2Y9.75%
EPS Next 3Y8.7%
EPS Next 5Y7%
Revenue 1Y (TTM)2.57%
Revenue growth 3Y8.31%
Revenue growth 5Y-1.45%
Sales Q2Q%2.08%
Revenue Next Year4.28%
Revenue Next 2Y4.85%
Revenue Next 3Y4.59%
Revenue Next 5Y3.79%
EBIT growth 1Y0.61%
EBIT growth 3Y12.28%
EBIT growth 5Y-1.74%
EBIT Next Year31.7%
EBIT Next 3Y14.31%
EBIT Next 5Y9.4%
FCF growth 1Y42.01%
FCF growth 3Y-10.73%
FCF growth 5Y-9.42%
OCF growth 1Y37.18%
OCF growth 3Y-6.24%
OCF growth 5Y-3.96%