ALCON INC (ALC)
CH0432492467 - Common Stock
We assign a fundamental rating of 6 out of 10 to ALC. ALC was compared to 192 industry peers in the Health Care Equipment & Supplies industry. ALC has an excellent profitability rating, but there are some minor concerns on its financial health. ALC is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
ALC had positive earnings in the past year.
In the past year ALC had a positive cash flow from operations.
In multiple years ALC reported negative net income over the last 5 years.
In the past 5 years ALC always reported a positive cash flow from operatings.
1.2 Ratios
ALC has a Return On Assets of 3.29%. This is in the better half of the industry: ALC outperforms 78.65% of its industry peers.
ALC has a Return On Equity of 4.72%. This is in the better half of the industry: ALC outperforms 76.56% of its industry peers.
ALC has a better Return On Invested Capital (3.15%) than 72.92% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ALC is significantly below the industry average of 8.50%.
The last Return On Invested Capital (3.15%) for ALC is above the 3 year average (2.41%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.29% | ||
| ROE | 4.72% | ||
| ROIC | 3.15% |
ROA(3y)1.93%
ROA(5y)0.3%
ROE(3y)2.79%
ROE(5y)0.43%
ROIC(3y)2.41%
ROIC(5y)N/A
1.3 Margins
The Profit Margin of ALC (10.30%) is better than 83.85% of its industry peers.
ALC has a better Operating Margin (12.49%) than 81.77% of its industry peers.
ALC's Operating Margin has improved in the last couple of years.
ALC has a Gross Margin of 55.57%. This is comparable to the rest of the industry: ALC outperforms 51.56% of its industry peers.
In the last couple of years the Gross Margin of ALC has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.49% | ||
| PM (TTM) | 10.3% | ||
| GM | 55.57% |
OM growth 3YN/A
OM growth 5Y35.03%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y7.1%
GM growth 5Y2.18%
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.
ALC has a better debt/assets ratio than last year.
2.2 Solvency
ALC has an Altman-Z score of 4.15. This indicates that ALC is financially healthy and has little risk of bankruptcy at the moment.
ALC has a better Altman-Z score (4.15) than 72.92% of its industry peers.
The Debt to FCF ratio of ALC is 9.60, which is on the high side as it means it would take ALC, 9.60 years of fcf income to pay off all of its debts.
ALC has a better Debt to FCF ratio (9.60) than 75.52% of its industry peers.
ALC has a Debt/Equity ratio of 0.24. This is a healthy value indicating a solid balance between debt and equity.
ALC's Debt to Equity ratio of 0.24 is in line compared to the rest of the industry. ALC outperforms 48.96% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 9.6 | ||
| Altman-Z | 4.15 |
ROIC/WACC0.63
WACC4.96%
2.3 Liquidity
A Current Ratio of 2.28 indicates that ALC has no problem at all paying its short term obligations.
The Current ratio of ALC (2.28) is worse than 68.23% of its industry peers.
ALC has a Quick Ratio of 1.34. This is a normal value and indicates that ALC is financially healthy and should not expect problems in meeting its short term obligations.
ALC's Quick ratio of 1.34 is on the low side compared to the rest of the industry. ALC is outperformed by 73.44% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.28 | ||
| Quick Ratio | 1.34 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 22.87% over the past year.
ALC shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 38.11% yearly.
Looking at the last year, ALC shows a quite strong growth in Revenue. The Revenue has grown by 8.47% in the last year.
ALC shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.74% yearly.
EPS 1Y (TTM)22.87%
EPS 3Y38.11%
EPS 5YN/A
EPS growth Q2Q64.29%
Revenue 1Y (TTM)8.47%
Revenue growth 3Y11.43%
Revenue growth 5Y5.74%
Revenue growth Q2Q8.34%
3.2 Future
Based on estimates for the next years, ALC will show a quite strong growth in Earnings Per Share. The EPS will grow by 13.01% on average per year.
ALC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.20% yearly.
EPS Next Y12.51%
EPS Next 2Y13.51%
EPS Next 3Y13.44%
EPS Next 5Y13.01%
Revenue Next Year6.35%
Revenue Next 2Y6.42%
Revenue Next 3Y6.46%
Revenue Next 5Y6.2%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 28.75, 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 78.13% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 24.84, ALC is valued at the same level.
A Price/Forward Earnings ratio of 25.55 indicates a quite expensive valuation of ALC.
Based on the Price/Forward Earnings ratio, ALC is valued a bit cheaper than 79.69% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.35, ALC is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.75 | ||
| Fwd PE | 25.55 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ALC is valued cheaply inside the industry as 82.81% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, ALC is valued a bit cheaper than the industry average as 76.04% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 72.63 | ||
| EV/EBITDA | 17.85 |
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 decent profitability rating of ALC may justify a higher PE ratio.
A more expensive valuation may be justified as ALC's earnings are expected to grow with 13.44% in the coming years.
PEG (NY)2.3
PEG (5Y)N/A
EPS Next 2Y13.51%
EPS Next 3Y13.44%
5. Dividend
5.1 Amount
ALC has a yearly dividend return of 0.34%, which is pretty low.
ALC's Dividend Yield is rather good when compared to the industry average which is at 1.69. ALC pays more dividend than 91.15% of the companies in the same industry.
With a Dividend Yield of 0.34, ALC pays less dividend than the S&P500 average, which is at 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.34% |
5.2 History
ALC has been paying a dividend for over 5 years, so it has already some track record.
ALC has decreased its dividend in the last 3 years.
Dividend Growth(5Y)N/A
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
11.91% of the earnings are spent on dividend by ALC. This is a low number and sustainable payout ratio.
DP11.91%
EPS Next 2Y13.51%
EPS Next 3Y13.44%
ALCON INC
NYSE:ALC (4/26/2024, 7:04:00 PM)
Premarket: 79.18 +0.41 (+0.52%)78.77
-0.07 (-0.09%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupHealth Care Equipment & Services
GICS IndustryHealth Care Equipment & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap38.86B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.34% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
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Revenue beat(2)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.75 | ||
| Fwd PE | 25.55 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)2.3
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.29% | ||
| ROE | 4.72% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 12.49% | ||
| PM (TTM) | 10.3% | ||
| GM | 55.57% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.32
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 2.28 | ||
| Quick Ratio | 1.34 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)22.87%
EPS 3Y38.11%
EPS 5Y
EPS growth Q2Q
EPS Next Y12.51%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)8.47%
Revenue growth 3Y11.43%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y