GSK PLC-SPON ADR (GSK) Stock Fundamental Analysis
NYSE:GSK - New York Stock Exchange, Inc. - US37733W2044 - ADR - Currency: USD
Taking everything into account, GSK scores 5 out of 10 in our fundamental rating. GSK was compared to 194 industry peers in the Pharmaceuticals industry. While GSK belongs to the best of the industry regarding profitability, there are concerns on its financial health. GSK is valued quite cheap, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
GSK had positive earnings in the past year.
GSK had a positive operating cash flow in the past year.
GSK had positive earnings in each of the past 5 years.
GSK had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of GSK (4.33%) is better than 87.03% of its industry peers.
GSK's Return On Equity of 18.84% is amongst the best of the industry. GSK outperforms 92.97% of its industry peers.
GSK's Return On Invested Capital of 18.59% is amongst the best of the industry. GSK outperforms 94.05% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.33% | ||
| ROE | 18.84% | ||
| ROIC | 18.59% |
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
With an excellent Profit Margin value of 8.21%, GSK belongs to the best of the industry, outperforming 86.49% of the companies in the same industry.
In the last couple of years the Profit Margin of GSK has declined.
Looking at the Operating Margin, with a value of 25.96%, GSK belongs to the top of the industry, outperforming 91.35% of the companies in the same industry.
GSK's Operating Margin has been stable in the last couple of years.
With a decent Gross Margin value of 71.90%, GSK is doing good in the industry, outperforming 77.84% of the companies in the same industry.
GSK's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 25.96% | ||
| PM (TTM) | 8.21% | ||
| GM | 71.9% |
OM growth 3Y3.7%
OM growth 5Y-0.27%
PM growth 3Y-22.68%
PM growth 5Y-9.82%
GM growth 3Y2.09%
GM growth 5Y0.57%
2. Health
2.1 Basic Checks
GSK has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
GSK has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
2.2 Solvency
An Altman-Z score of 1.88 indicates that GSK is not a great score, but indicates only limited risk for bankruptcy at the moment.
GSK's Altman-Z score of 1.88 is fine compared to the rest of the industry. GSK outperforms 67.03% of its industry peers.
The Debt to FCF ratio of GSK is 4.76, which is a neutral value as it means it would take GSK, 4.76 years of fcf income to pay off all of its debts.
GSK has a Debt to FCF ratio of 4.76. This is amongst the best in the industry. GSK outperforms 86.49% of its industry peers.
GSK has a Debt/Equity ratio of 1.07. This is a high value indicating a heavy dependency on external financing.
GSK's Debt to Equity ratio of 1.07 is on the low side compared to the rest of the industry. GSK is outperformed by 74.59% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.07 | ||
| Debt/FCF | 4.76 | ||
| Altman-Z | 1.88 |
ROIC/WACC2.15
WACC8.66%
2.3 Liquidity
GSK has a Current Ratio of 0.78. 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 0.78, GSK is not doing good in the industry: 91.89% of the companies in the same industry are doing better.
GSK has a Quick Ratio of 0.78. This is a bad value and indicates that GSK is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.52, GSK is doing worse than 94.59% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.78 | ||
| Quick Ratio | 0.52 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 18.15% over the past year.
The Earnings Per Share has been growing slightly by 3.41% on average over the past years.
GSK shows a small growth in Revenue. In the last year, the Revenue has grown by 3.46%.
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)18.15%
EPS 3Y9%
EPS 5Y3.41%
EPS Q2Q%62.81%
Revenue 1Y (TTM)3.46%
Revenue growth 3Y8.31%
Revenue growth 5Y-1.45%
Sales Q2Q%3.02%
3.2 Future
The Earnings Per Share is expected to grow by 2.07% on average over the next years.
Based on estimates for the next years, GSK will show a small growth in Revenue. The Revenue will grow by 3.17% on average per year.
EPS Next Y-7.59%
EPS Next 2Y1.68%
EPS Next 3Y4.24%
EPS Next 5Y2.07%
Revenue Next Year4.08%
Revenue Next 2Y4.71%
Revenue Next 3Y4.83%
Revenue Next 5Y3.17%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less 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
The Price/Earnings ratio is 7.88, which indicates a rather cheap valuation of GSK.
GSK's Price/Earnings ratio is rather cheap when compared to the industry. GSK is cheaper than 95.14% of the companies in the same industry.
When comparing the Price/Earnings ratio of GSK to the average of the S&P500 Index (30.30), we can say GSK is valued rather cheaply.
A Price/Forward Earnings ratio of 8.52 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 90.81% 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 (23.06), we can say GSK is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.88 | ||
| Fwd PE | 8.52 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of GSK indicates a rather cheap valuation: GSK is cheaper than 94.59% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of GSK indicates a rather cheap valuation: GSK is cheaper than 87.03% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.75 | ||
| EV/EBITDA | 6.55 |
4.3 Compensation for Growth
GSK has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)2.31
EPS Next 2Y1.68%
EPS Next 3Y4.24%
5. Dividend
5.1 Amount
GSK has a Yearly Dividend Yield of 4.22%, which is a nice return.
GSK's Dividend Yield is rather good when compared to the industry average which is at 4.34. GSK pays more dividend than 95.14% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.29, GSK pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.22% |
5.2 History
The dividend of GSK decreases each year by -10.98%.
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)-10.98%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
94.91% of the earnings are spent on dividend by GSK. This is not a sustainable payout ratio.
DP94.91%
EPS Next 2Y1.68%
EPS Next 3Y4.24%
36.96
+0.42 (+1.15%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners45.41%
Inst Owner Change-28.76%
Ins Owners0.16%
Ins Owner ChangeN/A
Market Cap75.42B
Analysts69.03
Price Target42.82 (15.85%)
Short Float %0.87%
Short Ratio3.95
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.22% |
Yearly Dividend0.56
Dividend Growth(5Y)-10.98%
DP94.91%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)75.57%
Min EPS beat(2)10.89%
Max EPS beat(2)140.26%
EPS beat(4)4
Avg EPS beat(4)44.29%
Min EPS beat(4)10.89%
Max EPS beat(4)140.26%
EPS beat(8)7
Avg EPS beat(8)24.61%
EPS beat(12)11
Avg EPS beat(12)20.51%
EPS beat(16)15
Avg EPS beat(16)19.34%
Revenue beat(2)1
Avg Revenue beat(2)0.23%
Min Revenue beat(2)-3.45%
Max Revenue beat(2)3.91%
Revenue beat(4)3
Avg Revenue beat(4)1.02%
Min Revenue beat(4)-3.45%
Max Revenue beat(4)3.91%
Revenue beat(8)7
Avg Revenue beat(8)2.55%
Revenue beat(12)9
Avg Revenue beat(12)0.21%
Revenue beat(16)9
Avg Revenue beat(16)-5.31%
PT rev (1m)-1.43%
PT rev (3m)-12.51%
EPS NQ rev (1m)-11.93%
EPS NQ rev (3m)-9.19%
EPS NY rev (1m)-2.72%
EPS NY rev (3m)-2.76%
Revenue NQ rev (1m)-1.89%
Revenue NQ rev (3m)-5.5%
Revenue NY rev (1m)0.36%
Revenue NY rev (3m)-1.11%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.88 | ||
| Fwd PE | 8.52 | ||
| P/S | 1.91 | ||
| P/FCF | 16.75 | ||
| P/OCF | 9.13 | ||
| P/B | 4.38 | ||
| P/tB | N/A | ||
| EV/EBITDA | 6.55 |
EPS(TTM)4.69
EY12.69%
EPS(NY)4.34
Fwd EY11.73%
FCF(TTM)2.21
FCFY5.97%
OCF(TTM)4.05
OCFY10.96%
SpS19.39
BVpS8.45
TBVpS-5.45
PEG (NY)N/A
PEG (5Y)2.31
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.33% | ||
| ROE | 18.84% | ||
| ROCE | 21.57% | ||
| ROIC | 18.59% | ||
| ROICexc | 20.73% | ||
| ROICexgc | 61.72% | ||
| OM | 25.96% | ||
| PM (TTM) | 8.21% | ||
| GM | 71.9% | ||
| FCFM | 11.38% |
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3Y3.7%
OM growth 5Y-0.27%
PM growth 3Y-22.68%
PM growth 5Y-9.82%
GM growth 3Y2.09%
GM growth 5Y0.57%
F-Score5
Asset Turnover0.53
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.07 | ||
| Debt/FCF | 4.76 | ||
| Debt/EBITDA | 1.31 | ||
| Cap/Depr | 99.9% | ||
| Cap/Sales | 9.5% | ||
| Interest Coverage | 12.89 | ||
| Cash Conversion | 58.88% | ||
| Profit Quality | 138.72% | ||
| Current Ratio | 0.78 | ||
| Quick Ratio | 0.52 | ||
| Altman-Z | 1.88 |
F-Score5
WACC8.66%
ROIC/WACC2.15
Cap/Depr(3y)102.42%
Cap/Depr(5y)105.16%
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)18.15%
EPS 3Y9%
EPS 5Y3.41%
EPS Q2Q%62.81%
EPS Next Y-7.59%
EPS Next 2Y1.68%
EPS Next 3Y4.24%
EPS Next 5Y2.07%
Revenue 1Y (TTM)3.46%
Revenue growth 3Y8.31%
Revenue growth 5Y-1.45%
Sales Q2Q%3.02%
Revenue Next Year4.08%
Revenue Next 2Y4.71%
Revenue Next 3Y4.83%
Revenue Next 5Y3.17%
EBIT growth 1Y8.66%
EBIT growth 3Y12.32%
EBIT growth 5Y-1.72%
EBIT Next Year35.05%
EBIT Next 3Y15.64%
EBIT Next 5Y9.49%
FCF growth 1Y-19.26%
FCF growth 3Y-10.73%
FCF growth 5Y-9.42%
OCF growth 1Y-3.16%
OCF growth 3Y-6.24%
OCF growth 5Y-3.96%