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 solid stock price performance, increase in net income, notable return on equity, expanding profit margins and growth in earnings per share. 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:
- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Household Products industry average. The net income increased by 1.7% when compared to the same quarter one year prior, going from $643.00 million to $654.00 million.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. 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.
- The gross profit margin for COLGATE-PALMOLIVE CO is rather high; currently it is at 61.00%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 15.09% is above that of the industry average.
- 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).
Colgate-Palmolive Company, together with its subsidiaries, manufactures and markets consumer products worldwide. Colgate-Palmolive has a market cap of $50.55 billion and is part of the consumer goods sector and consumer non-durables industry. The company has a P/E ratio of 21, above the S&P 500 P/E ratio of 17.7. Shares are up 14.9% year to date as of the close of trading on Thursday.
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--Written by a member of TheStreet Ratings Staff.
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