NEW YORK (TheStreet) -- Shares of Colgate-Palmolive Co. (CL) are slightly higher as it was reported that the chemical triclosan has been linked to cancer-cell growth and disrupted development in animals, Bloomberg reports.
Regulators are reviewing whether it’s safe to put in soap, cutting boards and toys. Consumer companies are phasing it out.
In May, Minnesota voted to ban it in many products.
A closer look at that application process, however, reveals that some of the scientific findings Colgate put forward to establish triclosan’s safety in toothpaste weren’t black and white -- and weren’t, until this year, available to the public, Bloomberg said.
"We rate COLGATE-PALMOLIVE CO (CL) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, good cash flow from operations, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- CL's revenue growth has slightly outpaced the industry average of 5.8%. Since the same quarter one year prior, revenues slightly increased by 0.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The gross profit margin for COLGATE-PALMOLIVE CO is rather high; currently it is at 61.24%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 14.29% is above that of the industry average.
- Net operating cash flow has slightly increased to $569.00 million or 3.83% when compared to the same quarter last year. In addition, COLGATE-PALMOLIVE CO has also modestly surpassed the industry average cash flow growth rate of -1.17%.
- COLGATE-PALMOLIVE CO has improved earnings per share by 11.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, COLGATE-PALMOLIVE CO reported lower earnings of $2.39 versus $2.58 in the prior year. This year, the market expects an improvement in earnings ($2.97 versus $2.39).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Household Products industry average. The net income increased by 10.9% when compared to the same quarter one year prior, going from $561.00 million to $622.00 million.
- You can view the full analysis from the report here: CL Ratings Report
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