Colgate-Palmolive Co

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CL : NYSE : Consumer Goods
$73.25 | %
Today's Range: 73.09 - 73.53
Avg. Daily Volume: 2,888,700
09/23/16 - 4:01 PM ET

Financial Analysis


COLGATE-PALMOLIVE CO's gross profit margin for the second quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Even though sales decreased, the net income has increased. COLGATE-PALMOLIVE CO has weak liquidity. Currently, the Quick Ratio is 0.60 which shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

At the same time, stockholders' equity ("net worth") has significantly decreased by 161.89% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q2 FY16 Q2 FY15
Net Sales ($mil)3845.04066.0
EBITDA ($mil)1119.01112.0
EBIT ($mil)1010.01001.0
Net Income ($mil)600.0574.0


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)1248.01307.0
Total Assets ($mil)12515.013660.0
Total Debt ($mil)6572.06683.0
Equity ($mil)-281.0454.0


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin63.0761.04
EBITDA Margin29.127.34
Operating Margin26.2724.62
Sales Turnover1.241.23
Return on Assets11.1916.73
Return on Equity0.0503.52
Debt Q2 FY16 Q2 FY15
Current Ratio0.991.19
Debt/Capital1.040.94
Interest Expense27.08.0
Interest Coverage37.41125.13


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)891.49900.13
Div / share0.390.38
EPS0.670.63
Book value / share-0.320.5
Institutional Own % n/a n/a
Avg Daily Volume3023726.03069667.0

Valuation


HOLD. COLGATE-PALMOLIVE CO's P/E ratio indicates a significant premium compared to an average of 28.58 for the Household Products industry and a significant premium compared to the S&P 500 average of 24.84. Normally, for additional comaprison, we would look at the price-to-book ratio; however, this company's price-to-book ratio is negative making the value useless for comparisons. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium. Upon assessment of these and other key valuation criteria, COLGATE-PALMOLIVE CO seems to be trading at a premium to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
CL 46.52 Peers 28.58   CL 21.05 Peers 16.31

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

CL is trading at a significant premium to its peers.

 

Premium. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

CL is trading at a significant premium to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
CL 23.33 Peers 23.12   CL 0.54 Peers 1.77

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

CL is trading at a premium to its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

CL trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
CL NM Peers 36.77   CL -37.76 Peers 36.48

Neutral. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

CL's P/B is negative making this valuation measure meaningless.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, CL is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
CL 4.15 Peers 3.42   CL -7.36 Peers -5.02

Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

CL is trading at a premium to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

CL significantly trails its peers on the basis of sales growth

 

 

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