COLGATE-PALMOLIVE CO (CL) Stock Fundamental Analysis
NYSE:CL - New York Stock Exchange, Inc. - US1941621039 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to CL. CL was compared to 12 industry peers in the Household Products industry. While CL belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. CL is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year CL was profitable.
In the past year CL had a positive cash flow from operations.
In the past 5 years CL has always been profitable.
Each year in the past 5 years CL had a positive operating cash flow.
1.2 Ratios
CL has a Return On Assets of 17.40%. This is amongst the best in the industry. CL outperforms 91.67% of its industry peers.
CL has a Return On Equity of 798.07%. This is amongst the best in the industry. CL outperforms 91.67% of its industry peers.
CL's Return On Invested Capital of 33.14% is amongst the best of the industry. CL outperforms 100.00% of its industry peers.
CL had an Average Return On Invested Capital over the past 3 years of 26.58%. This is significantly above the industry average of 15.82%.
The 3 year average ROIC (26.58%) for CL is below the current ROIC(33.14%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 17.4% | ||
| ROE | 798.07% | ||
| ROIC | 33.14% |
ROA(3y)14.46%
ROA(5y)14.94%
ROE(3y)728.51%
ROE(5y)580.79%
ROIC(3y)26.58%
ROIC(5y)26.1%
1.3 Margins
CL has a better Profit Margin (14.52%) than 91.67% of its industry peers.
In the last couple of years the Profit Margin of CL has remained more or less at the same level.
CL's Operating Margin of 21.76% is amongst the best of the industry. CL outperforms 91.67% of its industry peers.
In the last couple of years the Operating Margin of CL has declined.
Looking at the Gross Margin, with a value of 60.71%, CL belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
CL's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 21.76% | ||
| PM (TTM) | 14.52% | ||
| GM | 60.71% |
OM growth 3Y-1.21%
OM growth 5Y-1.94%
PM growth 3Y4.95%
PM growth 5Y-0.96%
GM growth 3Y0.53%
GM growth 5Y0.34%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so CL is creating value.
The number of shares outstanding for CL has been reduced compared to 1 year ago.
CL has less shares outstanding than it did 5 years ago.
CL has a better debt/assets ratio than last year.
2.2 Solvency
CL has an Altman-Z score of 6.96. This indicates that CL is financially healthy and has little risk of bankruptcy at the moment.
CL's Altman-Z score of 6.96 is amongst the best of the industry. CL outperforms 83.33% of its industry peers.
CL has a debt to FCF ratio of 2.39. This is a good value and a sign of high solvency as CL would need 2.39 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.39, CL is in the better half of the industry, outperforming 66.67% of the companies in the same industry.
A Debt/Equity ratio of 18.10 is on the high side and indicates that CL has dependencies on debt financing.
CL's Debt to Equity ratio of 18.10 is on the low side compared to the rest of the industry. CL is outperformed by 75.00% of its industry peers.
Although CL does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 18.1 | ||
| Debt/FCF | 2.39 | ||
| Altman-Z | 6.96 |
ROIC/WACC4
WACC8.29%
2.3 Liquidity
CL has a Current Ratio of 0.85. This is a bad value and indicates that CL is not financially healthy enough and could expect problems in meeting its short term obligations.
CL's Current ratio of 0.85 is on the low side compared to the rest of the industry. CL is outperformed by 66.67% of its industry peers.
CL has a Quick Ratio of 0.85. This is a bad value and indicates that CL is not financially healthy enough and could expect problems in meeting its short term obligations.
CL's Quick ratio of 0.54 is on the low side compared to the rest of the industry. CL is outperformed by 66.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.85 | ||
| Quick Ratio | 0.54 |
3. Growth
3.1 Past
CL shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 8.33%, which is quite good.
The Earnings Per Share has been growing slightly by 4.87% on average over the past years.
Looking at the last year, CL shows a small growth in Revenue. The Revenue has grown by 0.99% in the last year.
The Revenue has been growing slightly by 5.08% on average over the past years.
EPS 1Y (TTM)8.33%
EPS 3Y3.91%
EPS 5Y4.87%
EPS Q2Q%5.81%
Revenue 1Y (TTM)0.99%
Revenue growth 3Y4.89%
Revenue growth 5Y5.08%
Sales Q2Q%-3.04%
3.2 Future
Based on estimates for the next years, CL will show a small growth in Earnings Per Share. The EPS will grow by 7.05% on average per year.
CL is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.10% yearly.
EPS Next Y5%
EPS Next 2Y6.17%
EPS Next 3Y6.69%
EPS Next 5Y7.05%
Revenue Next Year0.65%
Revenue Next 2Y2.28%
Revenue Next 3Y2.83%
Revenue Next 5Y3.1%
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 decreasing.
4. Valuation
4.1 Price/Earnings Ratio
CL is valuated quite expensively with a Price/Earnings ratio of 25.49.
CL's Price/Earnings ratio is a bit more expensive when compared to the industry. CL is more expensive than 75.00% of the companies in the same industry.
CL's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.45.
The Price/Forward Earnings ratio is 22.93, which indicates a rather expensive current valuation of CL.
Based on the Price/Forward Earnings ratio, CL is valued a bit more expensive than 66.67% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.90, CL is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.49 | ||
| Fwd PE | 22.93 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, CL is valued a bit more expensive than the industry average as 66.67% of the companies are valued more cheaply.
66.67% of the companies in the same industry are cheaper than CL, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.69 | ||
| EV/EBITDA | 16.52 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates CL does not grow enough to justify the current Price/Earnings ratio.
CL has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)5.09
PEG (5Y)5.23
EPS Next 2Y6.17%
EPS Next 3Y6.69%
5. Dividend
5.1 Amount
CL has a Yearly Dividend Yield of 2.37%.
Compared to an average industry Dividend Yield of 3.11, CL has a dividend in line with its industry peers.
CL's Dividend Yield is comparable with the S&P500 average which is at 2.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.37% |
5.2 History
The dividend of CL has a limited annual growth rate of 3.11%.
CL has been paying a dividend for at least 10 years, so it has a reliable track record.
CL has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)3.11%
Div Incr Years34
Div Non Decr Years34
5.3 Sustainability
CL pays out 62.17% of its income as dividend. This is not a sustainable payout ratio.
CL's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP62.17%
EPS Next 2Y6.17%
EPS Next 3Y6.69%
92.78
+0.38 (+0.41%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupHousehold & Personal Products
GICS IndustryHousehold Products
Earnings (Last)
Earnings (Next)
Inst Owners86.12%
Inst Owner Change0.17%
Ins Owners0.05%
Ins Owner Change5.68%
Market Cap75.19B
Analysts74.67
Price Target99.76 (7.52%)
Short Float %1.46%
Short Ratio2.16
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.37% |
Yearly Dividend2.19
Dividend Growth(5Y)3.11%
DP62.17%
Div Incr Years34
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)1.04%
Min EPS beat(2)-0.87%
Max EPS beat(2)2.94%
EPS beat(4)2
Avg EPS beat(4)0.92%
Min EPS beat(4)-0.87%
Max EPS beat(4)2.94%
EPS beat(8)5
Avg EPS beat(8)1.28%
EPS beat(12)6
Avg EPS beat(12)0.48%
EPS beat(16)6
Avg EPS beat(16)-0.25%
Revenue beat(2)0
Avg Revenue beat(2)-2.73%
Min Revenue beat(2)-3.46%
Max Revenue beat(2)-2%
Revenue beat(4)0
Avg Revenue beat(4)-2.43%
Min Revenue beat(4)-3.46%
Max Revenue beat(4)-1.98%
Revenue beat(8)0
Avg Revenue beat(8)-1.69%
Revenue beat(12)2
Avg Revenue beat(12)-1.47%
Revenue beat(16)2
Avg Revenue beat(16)-1.81%
PT rev (1m)-0.56%
PT rev (3m)0.92%
EPS NQ rev (1m)-0.2%
EPS NQ rev (3m)-4.62%
EPS NY rev (1m)0.03%
EPS NY rev (3m)-1.38%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.78%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)1.03%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.49 | ||
| Fwd PE | 22.93 | ||
| P/S | 3.77 | ||
| P/FCF | 21.69 | ||
| P/OCF | 18.68 | ||
| P/B | 207.14 | ||
| P/tB | N/A | ||
| EV/EBITDA | 16.52 |
EPS(TTM)3.64
EY3.92%
EPS(NY)4.05
Fwd EY4.36%
FCF(TTM)4.28
FCFY4.61%
OCF(TTM)4.97
OCFY5.35%
SpS24.61
BVpS0.45
TBVpS-5.86
PEG (NY)5.09
PEG (5Y)5.23
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 17.4% | ||
| ROE | 798.07% | ||
| ROCE | 44.35% | ||
| ROIC | 33.14% | ||
| ROICexc | 38.27% | ||
| ROICexgc | 96.55% | ||
| OM | 21.76% | ||
| PM (TTM) | 14.52% | ||
| GM | 60.71% | ||
| FCFM | 17.38% |
ROA(3y)14.46%
ROA(5y)14.94%
ROE(3y)728.51%
ROE(5y)580.79%
ROIC(3y)26.58%
ROIC(5y)26.1%
ROICexc(3y)29.6%
ROICexc(5y)28.78%
ROICexgc(3y)61.47%
ROICexgc(5y)63.97%
ROCE(3y)35.89%
ROCE(5y)35.3%
ROICexcg growth 3Y6.99%
ROICexcg growth 5Y3.87%
ROICexc growth 3Y7.74%
ROICexc growth 5Y5.87%
OM growth 3Y-1.21%
OM growth 5Y-1.94%
PM growth 3Y4.95%
PM growth 5Y-0.96%
GM growth 3Y0.53%
GM growth 5Y0.34%
F-Score8
Asset Turnover1.2
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 18.1 | ||
| Debt/FCF | 2.39 | ||
| Debt/EBITDA | 1.33 | ||
| Cap/Depr | 92.7% | ||
| Cap/Sales | 2.8% | ||
| Interest Coverage | 15.07 | ||
| Cash Conversion | 81.45% | ||
| Profit Quality | 119.68% | ||
| Current Ratio | 0.85 | ||
| Quick Ratio | 0.54 | ||
| Altman-Z | 6.96 |
F-Score8
WACC8.29%
ROIC/WACC4
Cap/Depr(3y)114.92%
Cap/Depr(5y)104.56%
Cap/Sales(3y)3.43%
Cap/Sales(5y)3.21%
Profit Quality(3y)119.71%
Profit Quality(5y)121.85%
High Growth Momentum
Growth
EPS 1Y (TTM)8.33%
EPS 3Y3.91%
EPS 5Y4.87%
EPS Q2Q%5.81%
EPS Next Y5%
EPS Next 2Y6.17%
EPS Next 3Y6.69%
EPS Next 5Y7.05%
Revenue 1Y (TTM)0.99%
Revenue growth 3Y4.89%
Revenue growth 5Y5.08%
Sales Q2Q%-3.04%
Revenue Next Year0.65%
Revenue Next 2Y2.28%
Revenue Next 3Y2.83%
Revenue Next 5Y3.1%
EBIT growth 1Y3.85%
EBIT growth 3Y3.62%
EBIT growth 5Y3.04%
EBIT Next Year14.63%
EBIT Next 3Y8.54%
EBIT Next 5Y7.18%
FCF growth 1Y59.92%
FCF growth 3Y8.74%
FCF growth 5Y4.85%
OCF growth 1Y38.59%
OCF growth 3Y7.29%
OCF growth 5Y5.56%