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 195 industry peers in the Pharmaceuticals industry. While GSK has a great profitability rating, there are quite some concerns on its financial health. GSK has a bad growth rate and is valued cheaply.
1. Profitability
1.1 Basic Checks
In the past year GSK was profitable.
GSK had a positive operating cash flow in the past year.
Each year in the past 5 years GSK has been profitable.
GSK had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
GSK has a better Return On Assets (5.19%) than 88.72% of its industry peers.
GSK has a Return On Equity of 22.27%. This is amongst the best in the industry. GSK outperforms 94.36% of its industry peers.
Looking at the Return On Invested Capital, with a value of 17.01%, GSK belongs to the top of the industry, outperforming 93.85% of the companies in the same industry.
GSK had an Average Return On Invested Capital over the past 3 years of 18.38%. This is above the industry average of 14.87%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.19% | ||
| ROE | 22.27% | ||
| ROIC | 17.01% |
ROA(3y)12.52%
ROA(5y)10.05%
ROE(3y)65.63%
ROE(5y)53.08%
ROIC(3y)18.38%
ROIC(5y)14.53%
1.3 Margins
GSK has a Profit Margin of 10.00%. This is amongst the best in the industry. GSK outperforms 87.18% of its industry peers.
In the last couple of years the Profit Margin of GSK has declined.
GSK has a better Operating Margin (24.96%) than 90.77% of its industry peers.
GSK's Operating Margin has been stable in the last couple of years.
Looking at the Gross Margin, with a value of 72.01%, GSK belongs to the top of the industry, outperforming 81.03% 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 | 24.96% | ||
| PM (TTM) | 10% | ||
| GM | 72.01% |
OM growth 3Y3.67%
OM growth 5Y-0.3%
PM growth 3Y-22.68%
PM growth 5Y-9.82%
GM growth 3Y2.09%
GM growth 5Y0.57%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), GSK is creating value.
GSK has more shares outstanding than it did 1 year ago.
The number of shares outstanding for GSK has been increased compared to 5 years ago.
The debt/assets ratio for GSK has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 1.87 indicates that GSK is not a great score, but indicates only limited risk for bankruptcy at the moment.
GSK has a Altman-Z score of 1.87. This is in the better half of the industry: GSK outperforms 65.64% of its industry peers.
GSK has a debt to FCF ratio of 4.76. This is a neutral value as GSK would need 4.76 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 4.76, GSK belongs to the top of the industry, outperforming 84.62% of the companies in the same industry.
GSK has a Debt/Equity ratio of 1.16. This is a high value indicating a heavy dependency on external financing.
GSK has a Debt to Equity ratio of 1.16. This is in the lower half of the industry: GSK underperforms 73.33% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.16 | ||
| Debt/FCF | 4.76 | ||
| Altman-Z | 1.87 |
ROIC/WACC2.1
WACC8.11%
2.3 Liquidity
A Current Ratio of 0.87 indicates that GSK may have some problems paying its short term obligations.
GSK's Current ratio of 0.87 is on the low side compared to the rest of the industry. GSK is outperformed by 87.18% of its industry peers.
GSK has a Quick Ratio of 0.87. This is a bad value and indicates that GSK is not financially healthy enough and could expect problems in meeting its short term obligations.
GSK's Quick ratio of 0.58 is on the low side compared to the rest of the industry. GSK is outperformed by 88.72% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.87 | ||
| Quick Ratio | 0.58 |
3. Growth
3.1 Past
GSK shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by 0.00%.
The Earnings Per Share has been growing slightly by 0.56% on average over the past years.
GSK shows a small growth in Revenue. In the last year, the Revenue has grown by 2.57%.
The Revenue has been decreasing by -1.45% on average over the past years.
EPS 1Y (TTM)0%
EPS 3Y4.05%
EPS 5Y0.56%
EPS Q2Q%4.18%
Revenue 1Y (TTM)2.57%
Revenue growth 3Y8.31%
Revenue growth 5Y-1.45%
Sales Q2Q%2.08%
3.2 Future
The Earnings Per Share is expected to grow by 6.96% 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 3.79% on average per year.
EPS Next Y8.58%
EPS Next 2Y9.75%
EPS Next 3Y8.7%
EPS Next 5Y6.96%
Revenue Next Year4.28%
Revenue Next 2Y4.85%
Revenue Next 3Y4.59%
Revenue Next 5Y3.79%
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.
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 8.56, which indicates a very decent valuation of GSK.
92.82% of the companies in the same industry are more expensive than GSK, based on the Price/Earnings ratio.
GSK's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.30.
Based on the Price/Forward Earnings ratio of 7.18, the valuation of GSK can be described as very cheap.
Based on the Price/Forward Earnings ratio, GSK is valued cheaply inside the industry as 89.74% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.76, GSK is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.56 | ||
| Fwd PE | 7.18 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, GSK is valued cheaper than 93.33% of the companies in the same industry.
87.18% of the companies in the same industry are more expensive than GSK, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 14.73 | ||
| EV/EBITDA | 6.57 |
4.3 Compensation for Growth
GSK's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
GSK has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)1
PEG (5Y)15.25
EPS Next 2Y9.75%
EPS Next 3Y8.7%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.45%, GSK is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 4.05, GSK pays a better dividend. On top of this GSK pays more dividend than 95.90% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.37, GSK pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.45% |
5.2 History
The dividend of GSK decreases each year by -9.84%.
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)-9.84%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
78.91% of the earnings are spent on dividend by GSK. This is not a sustainable payout ratio.
DP78.91%
EPS Next 2Y9.75%
EPS Next 3Y8.7%
38.28
-1.3 (-3.28%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners39.99%
Inst Owner Change0%
Ins Owners0.16%
Ins Owner ChangeN/A
Market Cap77.44B
Analysts56.13
Price Target44.51 (16.27%)
Short Float %0.83%
Short Ratio3.18
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.45% |
Yearly Dividend1.66
Dividend Growth(5Y)-9.84%
DP78.91%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)14.16%
Min EPS beat(2)9.85%
Max EPS beat(2)18.46%
EPS beat(4)4
Avg EPS beat(4)12.59%
Min EPS beat(4)9.85%
Max EPS beat(4)18.46%
EPS beat(8)7
Avg EPS beat(8)9.54%
EPS beat(12)11
Avg EPS beat(12)10.79%
EPS beat(16)15
Avg EPS beat(16)12.11%
Revenue beat(2)1
Avg Revenue beat(2)0.04%
Min Revenue beat(2)-1.6%
Max Revenue beat(2)1.68%
Revenue beat(4)2
Avg Revenue beat(4)-0.23%
Min Revenue beat(4)-3.45%
Max Revenue beat(4)2.46%
Revenue beat(8)6
Avg Revenue beat(8)1.47%
Revenue beat(12)9
Avg Revenue beat(12)1.76%
Revenue beat(16)9
Avg Revenue beat(16)-5.01%
PT rev (1m)-1.05%
PT rev (3m)-0.37%
EPS NQ rev (1m)-1.12%
EPS NQ rev (3m)-2.94%
EPS NY rev (1m)0.17%
EPS NY rev (3m)-0.89%
Revenue NQ rev (1m)-0.31%
Revenue NQ rev (3m)-2.1%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.84%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.56 | ||
| Fwd PE | 7.18 | ||
| P/S | 1.81 | ||
| P/FCF | 14.73 | ||
| P/OCF | 8.46 | ||
| P/B | 4.03 | ||
| P/tB | N/A | ||
| EV/EBITDA | 6.57 |
EPS(TTM)4.47
EY11.68%
EPS(NY)5.33
Fwd EY13.92%
FCF(TTM)2.6
FCFY6.79%
OCF(TTM)4.52
OCFY11.81%
SpS21.15
BVpS9.5
TBVpS-6.06
PEG (NY)1
PEG (5Y)15.25
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.19% | ||
| ROE | 22.27% | ||
| ROCE | 19.73% | ||
| ROIC | 17.01% | ||
| ROICexc | 19.17% | ||
| ROICexgc | 55.58% | ||
| OM | 24.96% | ||
| PM (TTM) | 10% | ||
| GM | 72.01% | ||
| FCFM | 12.29% |
ROA(3y)12.52%
ROA(5y)10.05%
ROE(3y)65.63%
ROE(5y)53.08%
ROIC(3y)18.38%
ROIC(5y)14.53%
ROICexc(3y)22.56%
ROICexc(5y)17.82%
ROICexgc(3y)78.4%
ROICexgc(5y)77.5%
ROCE(3y)21.97%
ROCE(5y)17.32%
ROICexcg growth 3Y-7.02%
ROICexcg growth 5Y-6.42%
ROICexc growth 3Y24.64%
ROICexc growth 5Y6.13%
OM growth 3Y3.67%
OM growth 5Y-0.3%
PM growth 3Y-22.68%
PM growth 5Y-9.82%
GM growth 3Y2.09%
GM growth 5Y0.57%
F-Score5
Asset Turnover0.52
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.16 | ||
| Debt/FCF | 4.76 | ||
| Debt/EBITDA | 1.48 | ||
| Cap/Depr | 88.68% | ||
| Cap/Sales | 9.09% | ||
| Interest Coverage | 12.49 | ||
| Cash Conversion | 60.72% | ||
| Profit Quality | 122.87% | ||
| Current Ratio | 0.87 | ||
| Quick Ratio | 0.58 | ||
| Altman-Z | 1.87 |
F-Score5
WACC8.11%
ROIC/WACC2.1
Cap/Depr(3y)108.08%
Cap/Depr(5y)108.56%
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)0%
EPS 3Y4.05%
EPS 5Y0.56%
EPS Q2Q%4.18%
EPS Next Y8.58%
EPS Next 2Y9.75%
EPS Next 3Y8.7%
EPS Next 5Y6.96%
Revenue 1Y (TTM)2.57%
Revenue growth 3Y8.31%
Revenue growth 5Y-1.45%
Sales Q2Q%2.08%
Revenue Next Year4.28%
Revenue Next 2Y4.85%
Revenue Next 3Y4.59%
Revenue Next 5Y3.79%
EBIT growth 1Y0.61%
EBIT growth 3Y12.28%
EBIT growth 5Y-1.74%
EBIT Next Year31.7%
EBIT Next 3Y14.31%
EBIT Next 5Y9.4%
FCF growth 1Y42.01%
FCF growth 3Y-10.73%
FCF growth 5Y-9.42%
OCF growth 1Y37.18%
OCF growth 3Y-6.24%
OCF growth 5Y-3.96%