ALCON INC (ALC) Stock Fundamental Analysis
NYSE:ALC - New York Stock Exchange, Inc. - CH0432492467 - Common Stock - Currency: USD
ALC gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 188 industry peers in the Health Care Equipment & Supplies industry. ALC scores excellent on profitability, but there are some minor concerns on its financial health. ALC has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year ALC was profitable.
In the past year ALC had a positive cash flow from operations.
ALC had positive earnings in 4 of the past 5 years.
Each year in the past 5 years ALC had a positive operating cash flow.
1.2 Ratios
The Return On Assets of ALC (3.61%) is better than 79.79% of its industry peers.
Looking at the Return On Equity, with a value of 5.09%, ALC is in the better half of the industry, outperforming 79.79% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 3.93%, ALC is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for ALC is below the industry average of 7.89%.
The last Return On Invested Capital (3.93%) for ALC is above the 3 year average (3.01%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.61% | ||
| ROE | 5.09% | ||
| ROIC | 3.93% |
ROA(3y)2.6%
ROA(5y)1.44%
ROE(3y)3.72%
ROE(5y)2.06%
ROIC(3y)3.01%
ROIC(5y)N/A
1.3 Margins
ALC's Profit Margin of 11.28% is amongst the best of the industry. ALC outperforms 87.23% of its industry peers.
ALC's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 14.07%, ALC belongs to the top of the industry, outperforming 82.45% of the companies in the same industry.
In the last couple of years the Operating Margin of ALC has grown nicely.
ALC has a Gross Margin (54.25%) which is in line with its industry peers.
ALC's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.07% | ||
| PM (TTM) | 11.28% | ||
| GM | 54.25% |
OM growth 3Y6.79%
OM growth 5Y35.45%
PM growth 3Y31.33%
PM growth 5YN/A
GM growth 3Y-0.59%
GM growth 5Y2.7%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so ALC is destroying value.
ALC has more shares outstanding than it did 1 year ago.
The number of shares outstanding for ALC has been increased compared to 5 years ago.
Compared to 1 year ago, ALC has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 4.53 indicates that ALC is not in any danger for bankruptcy at the moment.
With a decent Altman-Z score value of 4.53, ALC is doing good in the industry, outperforming 75.00% of the companies in the same industry.
ALC has a debt to FCF ratio of 3.58. This is a good value and a sign of high solvency as ALC would need 3.58 years to pay back of all of its debts.
ALC's Debt to FCF ratio of 3.58 is amongst the best of the industry. ALC outperforms 87.23% of its industry peers.
A Debt/Equity ratio of 0.23 indicates that ALC is not too dependend on debt financing.
ALC has a Debt to Equity ratio (0.23) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.23 | ||
| Debt/FCF | 3.58 | ||
| Altman-Z | 4.53 |
ROIC/WACC0.83
WACC4.75%
2.3 Liquidity
A Current Ratio of 2.70 indicates that ALC has no problem at all paying its short term obligations.
The Current ratio of ALC (2.70) is comparable to the rest of the industry.
A Quick Ratio of 1.66 indicates that ALC should not have too much problems paying its short term obligations.
ALC has a Quick ratio of 1.66. This is comparable to the rest of the industry: ALC outperforms 46.28% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.7 | ||
| Quick Ratio | 1.66 |
3. Growth
3.1 Past
ALC shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 6.38%.
Measured over the past years, ALC shows a quite strong growth in Earnings Per Share. The EPS has been growing by 10.04% on average per year.
Looking at the last year, ALC shows a small growth in Revenue. The Revenue has grown by 3.80% in the last year.
The Revenue has been growing slightly by 5.71% on average over the past years.
EPS 1Y (TTM)6.38%
EPS 3Y12.36%
EPS 5Y10.04%
EPS Q2Q%-6.41%
Revenue 1Y (TTM)3.8%
Revenue growth 3Y6.13%
Revenue growth 5Y5.71%
Sales Q2Q%0.29%
3.2 Future
ALC is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 12.48% yearly.
ALC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.95% yearly.
EPS Next Y8.02%
EPS Next 2Y11.99%
EPS Next 3Y12.14%
EPS Next 5Y12.48%
Revenue Next Year5.62%
Revenue Next 2Y6.39%
Revenue Next 3Y6.33%
Revenue Next 5Y6.95%
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
With a Price/Earnings ratio of 29.65, ALC can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Earnings ratio of ALC indicates a somewhat cheap valuation: ALC is cheaper than 74.47% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of ALC to the average of the S&P500 Index (26.59), we can say ALC is valued inline with the index average.
Based on the Price/Forward Earnings ratio of 23.25, the valuation of ALC can be described as rather expensive.
ALC's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. ALC is cheaper than 75.53% of the companies in the same industry.
ALC is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 22.39, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.65 | ||
| Fwd PE | 23.25 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ALC is valued a bit cheaper than the industry average as 76.06% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ALC indicates a rather cheap valuation: ALC is cheaper than 81.91% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.59 | ||
| EV/EBITDA | 18.01 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
ALC has a very decent profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as ALC's earnings are expected to grow with 12.14% in the coming years.
PEG (NY)3.7
PEG (5Y)2.95
EPS Next 2Y11.99%
EPS Next 3Y12.14%
5. Dividend
5.1 Amount
ALC has a yearly dividend return of 0.39%, which is pretty low.
Compared to an average industry Dividend Yield of 1.89, ALC pays a better dividend. On top of this ALC pays more dividend than 90.96% of the companies listed in the same industry.
With a Dividend Yield of 0.39, ALC pays less dividend than the S&P500 average, which is at 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.39% |
5.2 History
ALC has been paying a dividend for over 5 years, so it has already some track record.
The dividend of ALC decreased recently.
Dividend Growth(5Y)N/A
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
11.61% of the earnings are spent on dividend by ALC. This is a low number and sustainable payout ratio.
DP11.61%
EPS Next 2Y11.99%
EPS Next 3Y12.14%
88.95
+1.47 (+1.68%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupHealth Care Equipment & Services
GICS IndustryHealth Care Equipment & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners69.58%
Inst Owner Change-6.28%
Ins Owners0.12%
Ins Owner ChangeN/A
Market Cap44.45B
Analysts80.91
Price Target113.02 (27.06%)
Short Float %1.02%
Short Ratio2.8
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.39% |
Yearly Dividend0.26
Dividend Growth(5Y)N/A
DP11.61%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-1.84%
Min EPS beat(2)-4.26%
Max EPS beat(2)0.57%
EPS beat(4)3
Avg EPS beat(4)1.13%
Min EPS beat(4)-4.26%
Max EPS beat(4)7.68%
EPS beat(8)6
Avg EPS beat(8)1.96%
EPS beat(12)8
Avg EPS beat(12)2.89%
EPS beat(16)12
Avg EPS beat(16)5.61%
Revenue beat(2)0
Avg Revenue beat(2)-1.99%
Min Revenue beat(2)-3.43%
Max Revenue beat(2)-0.56%
Revenue beat(4)0
Avg Revenue beat(4)-2.34%
Min Revenue beat(4)-3.43%
Max Revenue beat(4)-0.56%
Revenue beat(8)1
Avg Revenue beat(8)-1.91%
Revenue beat(12)2
Avg Revenue beat(12)-1.23%
Revenue beat(16)6
Avg Revenue beat(16)0.08%
PT rev (1m)-4.14%
PT rev (3m)10.04%
EPS NQ rev (1m)-3.79%
EPS NQ rev (3m)-7.38%
EPS NY rev (1m)0%
EPS NY rev (3m)-2.93%
Revenue NQ rev (1m)0.23%
Revenue NQ rev (3m)-0.71%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.03%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.65 | ||
| Fwd PE | 23.25 | ||
| P/S | 4.48 | ||
| P/FCF | 30.59 | ||
| P/OCF | 20.97 | ||
| P/B | 2.02 | ||
| P/tB | 12.91 | ||
| EV/EBITDA | 18.01 |
EPS(TTM)3
EY3.37%
EPS(NY)3.83
Fwd EY4.3%
FCF(TTM)2.91
FCFY3.27%
OCF(TTM)4.24
OCFY4.77%
SpS19.86
BVpS44.03
TBVpS6.89
PEG (NY)3.7
PEG (5Y)2.95
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.61% | ||
| ROE | 5.09% | ||
| ROCE | 4.85% | ||
| ROIC | 3.93% | ||
| ROICexc | 4.14% | ||
| ROICexgc | 12.86% | ||
| OM | 14.07% | ||
| PM (TTM) | 11.28% | ||
| GM | 54.25% | ||
| FCFM | 14.64% |
ROA(3y)2.6%
ROA(5y)1.44%
ROE(3y)3.72%
ROE(5y)2.06%
ROIC(3y)3.01%
ROIC(5y)N/A
ROICexc(3y)3.18%
ROICexc(5y)N/A
ROICexgc(3y)10.24%
ROICexgc(5y)N/A
ROCE(3y)3.72%
ROCE(5y)N/A
ROICexcg growth 3Y2.95%
ROICexcg growth 5Y30.08%
ROICexc growth 3Y10.31%
ROICexc growth 5Y41.26%
OM growth 3Y6.79%
OM growth 5Y35.45%
PM growth 3Y31.33%
PM growth 5YN/A
GM growth 3Y-0.59%
GM growth 5Y2.7%
F-Score6
Asset Turnover0.32
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.23 | ||
| Debt/FCF | 3.58 | ||
| Debt/EBITDA | 1.91 | ||
| Cap/Depr | 53.75% | ||
| Cap/Sales | 6.72% | ||
| Interest Coverage | 7.59 | ||
| Cash Conversion | 80.39% | ||
| Profit Quality | 129.73% | ||
| Current Ratio | 2.7 | ||
| Quick Ratio | 1.66 | ||
| Altman-Z | 4.53 |
F-Score6
WACC4.75%
ROIC/WACC0.83
Cap/Depr(3y)77.98%
Cap/Depr(5y)73.14%
Cap/Sales(3y)9.96%
Cap/Sales(5y)10.48%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)6.38%
EPS 3Y12.36%
EPS 5Y10.04%
EPS Q2Q%-6.41%
EPS Next Y8.02%
EPS Next 2Y11.99%
EPS Next 3Y12.14%
EPS Next 5Y12.48%
Revenue 1Y (TTM)3.8%
Revenue growth 3Y6.13%
Revenue growth 5Y5.71%
Sales Q2Q%0.29%
Revenue Next Year5.62%
Revenue Next 2Y6.39%
Revenue Next 3Y6.33%
Revenue Next 5Y6.95%
EBIT growth 1Y12.13%
EBIT growth 3Y13.34%
EBIT growth 5Y43.18%
EBIT Next Year44.89%
EBIT Next 3Y21.32%
EBIT Next 5Y15.19%
FCF growth 1Y202.71%
FCF growth 3Y104.3%
FCF growth 5Y41.96%
OCF growth 1Y71.52%
OCF growth 3Y15.59%
OCF growth 5Y17.69%