Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of A+ . The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, good cash flow from operations, growth in earnings per share and expanding profit margins. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
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Highlights from the ratings report include:
- CL's revenue growth has slightly outpaced the industry average of 7.0%. Since the same quarter one year prior, revenues slightly increased by 2.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Household Products industry and the overall market, COLGATE-PALMOLIVE CO's return on equity significantly exceeds that of both the industry average and the S&P 500.
- Net operating cash flow has increased to $531.00 million or 12.02% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -4.25%.
- COLGATE-PALMOLIVE CO's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, COLGATE-PALMOLIVE CO increased its bottom line by earning $4.94 versus $4.31 in the prior year. This year, the market expects an improvement in earnings ($5.35 versus $4.94).
- The gross profit margin for COLGATE-PALMOLIVE CO is rather high; currently it is at 60.30%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 14.70% trails the industry average.
Colgate-Palmolive Company, together with its subsidiaries, manufactures and markets consumer products worldwide. The company has a P/E ratio of 20.7, equal to the average consumer non-durables industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Colgate-Palmolive has a market cap of $49.92 billion and is part of the
industry. Shares are up 14.5% year to date as of the close of trading on Friday.
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--Written by a member of TheStreet Ratings Staff.