COLGATE-PALMOLIVE CO (CL) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:CL - US1941621039 - Common Stock
85.76 USD
+0.56 (+0.66%)
85.3 USD
-0.46 (-0.54%)
We assign a fundamental rating of 5 out of 10 to CL. CL was compared to 12 industry peers in the Household Products industry. CL scores excellent on profitability, but there are some minor concerns on its financial health. CL has a expensive valuation and it also scores bad on growth.
1. Profitability
1.1 Basic Checks
- CL had positive earnings in the past year.
- CL had a positive operating cash flow in the past year.
- In the past 5 years CL has always been profitable.
- In the past 5 years CL always reported a positive cash flow from operatings.
1.2 Ratios
- CL has a better Return On Assets (16.60%) than 91.67% of its industry peers.
- With an excellent Return On Equity value of 339.60%, CL belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
- CL has a Return On Invested Capital of 29.23%. This is amongst the best in the industry. CL outperforms 100.00% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for CL is significantly above the industry average of 14.84%.
- The last Return On Invested Capital (29.23%) for CL is above the 3 year average (26.58%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.6% | ||
| ROE | 339.6% | ||
| ROIC | 29.23% |
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 Profit Margin of 14.46%. This is amongst the best in the industry. CL outperforms 91.67% of its industry peers.
- CL's Profit Margin has been stable in the last couple of years.
- CL's Operating Margin of 21.44% 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.
- The Gross Margin of CL (60.14%) is better than 100.00% of its industry peers.
- In the last couple of years the Gross Margin of CL has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 21.44% | ||
| PM (TTM) | 14.46% | ||
| GM | 60.14% |
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
- CL has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
- The number of shares outstanding for CL has been reduced compared to 1 year ago.
- Compared to 5 years ago, CL has less shares outstanding
- CL has a better debt/assets ratio than last year.
2.2 Solvency
- CL has an Altman-Z score of 6.58. This indicates that CL is financially healthy and has little risk of bankruptcy at the moment.
- CL has a better Altman-Z score (6.58) than 83.33% of its industry peers.
- CL has a debt to FCF ratio of 2.45. This is a good value and a sign of high solvency as CL would need 2.45 years to pay back of all of its debts.
- CL has a better Debt to FCF ratio (2.45) than 75.00% of its industry peers.
- A Debt/Equity ratio of 8.54 is on the high side and indicates that CL has dependencies on debt financing.
- CL's Debt to Equity ratio of 8.54 is on the low side compared to the rest of the industry. CL is outperformed by 75.00% of its industry peers.
- Even though the debt/equity ratio score it not favorable for CL, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 8.54 | ||
| Debt/FCF | 2.45 | ||
| Altman-Z | 6.58 |
ROIC/WACC3.56
WACC8.21%
2.3 Liquidity
- CL has a Current Ratio of 0.93. 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 has a worse Current ratio (0.93) than 66.67% of its industry peers.
- A Quick Ratio of 0.60 indicates that CL may have some problems paying its short term obligations.
- CL has a Quick ratio of 0.60. This is in the lower half of the industry: CL underperforms 66.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.93 | ||
| Quick Ratio | 0.6 |
3. Growth
3.1 Past
- The Earnings Per Share has been growing slightly by 2.82% over the past year.
- CL shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 4.87% yearly.
- The Revenue has decreased by -0.04% in the past year.
- The Revenue has been growing slightly by 5.08% on average over the past years.
EPS 1Y (TTM)2.82%
EPS 3Y3.91%
EPS 5Y4.87%
EPS Q2Q%0%
Revenue 1Y (TTM)-0.04%
Revenue growth 3Y4.89%
Revenue growth 5Y5.08%
Sales Q2Q%1.95%
3.2 Future
- CL is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 5.90% yearly.
- Based on estimates for the next years, CL will show a small growth in Revenue. The Revenue will grow by 2.66% on average per year.
EPS Next Y4.86%
EPS Next 2Y4.96%
EPS Next 3Y5.41%
EPS Next 5Y5.9%
Revenue Next Year0.65%
Revenue Next 2Y2.04%
Revenue Next 3Y2.49%
Revenue Next 5Y2.66%
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
- The Price/Earnings ratio is 23.50, which indicates a rather expensive current valuation of CL.
- Compared to the rest of the industry, the Price/Earnings ratio of CL indicates a slightly more expensive valuation: CL is more expensive than 75.00% of the companies listed in the same industry.
- The average S&P500 Price/Earnings ratio is at 28.82. CL is around the same levels.
- The Price/Forward Earnings ratio is 21.69, which indicates a rather expensive current valuation of CL.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of CL indicates a slightly more expensive valuation: CL is more expensive than 66.67% of the companies listed in the same industry.
- Compared to an average S&P500 Price/Forward Earnings ratio of 25.95, CL is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.5 | ||
| Fwd PE | 21.69 |
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.
- CL's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.08 | ||
| EV/EBITDA | 15.44 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- CL has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)4.83
PEG (5Y)4.82
EPS Next 2Y4.96%
EPS Next 3Y5.41%
5. Dividend
5.1 Amount
- CL has a Yearly Dividend Yield of 2.42%.
- CL's Dividend Yield is comparable with the industry average which is at 2.65.
- Compared to an average S&P500 Dividend Yield of 1.82, CL pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.42% |
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
- 62.40% of the earnings are spent on dividend by CL. This is not a sustainable payout ratio.
- CL's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP62.4%
EPS Next 2Y4.96%
EPS Next 3Y5.41%
COLGATE-PALMOLIVE CO / CL FAQ
Can you provide the ChartMill fundamental rating for COLGATE-PALMOLIVE CO?
ChartMill assigns a fundamental rating of 5 / 10 to CL.
Can you provide the valuation status for COLGATE-PALMOLIVE CO?
ChartMill assigns a valuation rating of 2 / 10 to COLGATE-PALMOLIVE CO (CL). This can be considered as Overvalued.
How profitable is COLGATE-PALMOLIVE CO (CL) stock?
COLGATE-PALMOLIVE CO (CL) has a profitability rating of 9 / 10.
What is the valuation of COLGATE-PALMOLIVE CO based on its PE and PB ratios?
The Price/Earnings (PE) ratio for COLGATE-PALMOLIVE CO (CL) is 23.5 and the Price/Book (PB) ratio is 80.76.
Can you provide the dividend sustainability for CL stock?
The dividend rating of COLGATE-PALMOLIVE CO (CL) is 6 / 10 and the dividend payout ratio is 62.4%.