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 198 industry peers in the Pharmaceuticals industry. While GSK belongs to the best of the industry regarding profitability, there are concerns on its financial health. A decent growth rate in combination with a cheap valuation! Better keep an eye on GSK.
1. Profitability
1.1 Basic Checks
In the past year GSK was profitable.
In the past year GSK had a positive cash flow from operations.
GSK had positive earnings in each of the past 5 years.
In the past 5 years GSK always reported a positive cash flow from operatings.
1.2 Ratios
GSK has a Return On Assets of 5.19%. This is amongst the best in the industry. GSK outperforms 88.89% of its industry peers.
With an excellent Return On Equity value of 22.27%, GSK belongs to the best of the industry, outperforming 93.94% of the companies in the same industry.
GSK's Return On Invested Capital of 17.01% is amongst the best of the industry. GSK outperforms 92.93% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for GSK is significantly below the industry average of 41.51%.
| 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
The Profit Margin of GSK (10.00%) is better than 86.36% of its industry peers.
In the last couple of years the Profit Margin of GSK has declined.
The Operating Margin of GSK (24.96%) is better than 89.90% of its industry peers.
GSK's Operating Margin has been stable in the last couple of years.
With a decent Gross Margin value of 72.01%, GSK is doing good in the industry, outperforming 79.29% of the companies in the same industry.
In the last couple of years the Gross Margin of GSK has remained more or less at the same level.
| 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.
GSK has a better debt/assets ratio than last year.
2.2 Solvency
GSK has an Altman-Z score of 1.83. This is not the best score and indicates that GSK is in the grey zone with still only limited risk for bankruptcy at the moment.
GSK has a Altman-Z score of 1.83. This is in the better half of the industry: GSK outperforms 67.17% 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 84.34% 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.
Looking at the Debt to Equity ratio, with a value of 1.16, GSK is doing worse than 71.72% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.16 | ||
| Debt/FCF | 4.76 | ||
| Altman-Z | 1.83 |
ROIC/WACC2.18
WACC7.79%
2.3 Liquidity
A Current Ratio of 0.87 indicates that GSK may have some problems paying its short term obligations.
With a Current ratio value of 0.87, GSK is not doing good in the industry: 86.36% of the companies in the same industry are doing better.
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 has a worse Quick ratio (0.58) than 87.88% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.87 | ||
| Quick Ratio | 0.58 |
3. Growth
3.1 Past
GSK shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 24.62%, which is quite impressive.
The Earnings Per Share has been growing slightly by 0.56% on average over the past years.
Looking at the last year, GSK shows a small growth in Revenue. The Revenue has grown by 2.57% in the last year.
The Revenue has been decreasing by -1.45% on average over the past years.
EPS 1Y (TTM)24.62%
EPS 3Y4.05%
EPS 5Y0.56%
EPS Q2Q%96.24%
Revenue 1Y (TTM)2.57%
Revenue growth 3Y8.31%
Revenue growth 5Y-1.45%
Sales Q2Q%-3.79%
3.2 Future
GSK is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 6.13% yearly.
The Revenue is expected to grow by 3.33% on average over the next years.
EPS Next Y8.58%
EPS Next 2Y9.75%
EPS Next 3Y8.7%
EPS Next 5Y6.13%
Revenue Next Year4.28%
Revenue Next 2Y4.85%
Revenue Next 3Y4.59%
Revenue Next 5Y3.33%
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
Based on the Price/Earnings ratio of 6.67, the valuation of GSK can be described as very cheap.
Based on the Price/Earnings ratio, GSK is valued cheaper than 94.44% of the companies in the same industry.
GSK is valuated cheaply when we compare the Price/Earnings ratio to 24.85, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 6.98, which indicates a rather cheap valuation of GSK.
GSK's Price/Forward Earnings ratio is rather cheap when compared to the industry. GSK is cheaper than 92.93% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 20.89. GSK is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.67 | ||
| Fwd PE | 6.98 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, GSK is valued cheaply inside the industry as 91.92% of the companies are valued more expensively.
87.37% 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 | 14.31 | ||
| EV/EBITDA | 6.27 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The decent profitability rating of GSK may justify a higher PE ratio.
PEG (NY)0.78
PEG (5Y)11.88
EPS Next 2Y9.75%
EPS Next 3Y8.7%
5. Dividend
5.1 Amount
GSK has a Yearly Dividend Yield of 4.55%, which is a nice return.
GSK's Dividend Yield is rather good when compared to the industry average which is at 4.19. GSK pays more dividend than 96.46% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.40, GSK pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.55% |
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
GSK pays out 78.91% of its income as dividend. This is not a sustainable payout ratio.
DP78.91%
EPS Next 2Y9.75%
EPS Next 3Y8.7%
36.22
-0.13 (-0.36%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners45.07%
Inst Owner Change0%
Ins Owners0.16%
Ins Owner ChangeN/A
Market Cap73.29B
Analysts56.13
Price Target44.98 (24.19%)
Short Float %0.87%
Short Ratio3.1
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.55% |
Yearly Dividend1.62
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)62.27%
Min EPS beat(2)18.46%
Max EPS beat(2)106.08%
EPS beat(4)4
Avg EPS beat(4)36.64%
Min EPS beat(4)10.89%
Max EPS beat(4)106.08%
EPS beat(8)7
Avg EPS beat(8)21.57%
EPS beat(12)11
Avg EPS beat(12)18.81%
EPS beat(16)15
Avg EPS beat(16)18.13%
Revenue beat(2)1
Avg Revenue beat(2)-2.91%
Min Revenue beat(2)-7.49%
Max Revenue beat(2)1.68%
Revenue beat(4)2
Avg Revenue beat(4)-1.7%
Min Revenue beat(4)-7.49%
Max Revenue beat(4)2.46%
Revenue beat(8)6
Avg Revenue beat(8)0.74%
Revenue beat(12)9
Avg Revenue beat(12)1.27%
Revenue beat(16)9
Avg Revenue beat(16)-5.38%
PT rev (1m)0.69%
PT rev (3m)5.06%
EPS NQ rev (1m)-0.08%
EPS NQ rev (3m)-0.02%
EPS NY rev (1m)-1.12%
EPS NY rev (3m)2.85%
Revenue NQ rev (1m)-1.09%
Revenue NQ rev (3m)0.26%
Revenue NY rev (1m)-0.84%
Revenue NY rev (3m)0.26%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.67 | ||
| Fwd PE | 6.98 | ||
| P/S | 1.76 | ||
| P/FCF | 14.31 | ||
| P/OCF | 8.22 | ||
| P/B | 3.92 | ||
| P/tB | N/A | ||
| EV/EBITDA | 6.27 |
EPS(TTM)5.43
EY14.99%
EPS(NY)5.19
Fwd EY14.33%
FCF(TTM)2.53
FCFY6.99%
OCF(TTM)4.4
OCFY12.16%
SpS20.6
BVpS9.25
TBVpS-5.9
PEG (NY)0.78
PEG (5Y)11.88
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 | 1.83 |
F-Score5
WACC7.79%
ROIC/WACC2.18
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)24.62%
EPS 3Y4.05%
EPS 5Y0.56%
EPS Q2Q%96.24%
EPS Next Y8.58%
EPS Next 2Y9.75%
EPS Next 3Y8.7%
EPS Next 5Y6.13%
Revenue 1Y (TTM)2.57%
Revenue growth 3Y8.31%
Revenue growth 5Y-1.45%
Sales Q2Q%-3.79%
Revenue Next Year4.28%
Revenue Next 2Y4.85%
Revenue Next 3Y4.59%
Revenue Next 5Y3.33%
EBIT growth 1Y0.61%
EBIT growth 3Y12.28%
EBIT growth 5Y-1.74%
EBIT Next Year33.76%
EBIT Next 3Y14.7%
EBIT Next 5Y8.94%
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%