Colgate-Palmolive Company
Colgate-Palmolive Company Fundamental Analysis
Colgate-Palmolive Company (CL) shows weak financial fundamentals with a PE ratio of 36.75, profit margin of 10.46%, and ROE of 4.32%. The company generates $20.4B in annual revenue with moderate year-over-year growth of 3.31%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 27.2/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze CL's fundamental strength across five key dimensions:
Efficiency Score
ExcellentCL demonstrates superior asset utilization.
Valuation Score
ModerateCL shows balanced valuation metrics.
Growth Score
ModerateCL shows steady but slowing expansion.
Financial Health Score
WeakCL carries high financial risk with limited liquidity.
Profitability Score
WeakCL struggles to sustain strong margins.
Key Financial Metrics
Is CL Expensive or Cheap?
P/E Ratio
CL trades at 36.75 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, CL's PEG of -1.37 indicates potential undervaluation.
Price to Book
The market values Colgate-Palmolive Company at 1450.40 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 19.02 times EBITDA. This signals the market has high growth expectations.
How Well Does CL Make Money?
Net Profit Margin
For every $100 in sales, Colgate-Palmolive Company keeps $10.46 as profit after all expenses.
Operating Margin
Core operations generate 21.31 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $4.32 in profit for every $100 of shareholder equity.
ROA
Colgate-Palmolive Company generates $13.05 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Colgate-Palmolive Company produces operating cash flow of $4.21B, showing steady but balanced cash generation.
Free Cash Flow
Colgate-Palmolive Company generates strong free cash flow of $3.64B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $4.52 in free cash annually.
FCF Yield
CL converts 4.63% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
36.75
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-1.37
vs 25 benchmark
P/B Ratio
Price to book value ratio
1450.40
vs 25 benchmark
P/S Ratio
Price to sales ratio
3.85
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
147.93
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.00
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
4.32
vs 25 benchmark
ROA
Return on assets percentage
0.13
vs 25 benchmark
ROCE
Return on capital employed
0.41
vs 25 benchmark
How CL Stacks Against Its Sector Peers
| Metric | CL Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 36.75 | 23.01 | Worse (Expensive) |
| ROE | 431.59% | 1228.00% | Weak |
| Net Margin | 10.46% | -4010.00% (disorted) | Strong |
| Debt/Equity | 147.93 | 0.78 | Weak (High Leverage) |
| Current Ratio | 1.00 | 2.35 | Weak Liquidity |
| ROA | 13.05% | -157546.00% (disorted) | Strong |
CL outperforms its industry in 2 out of 6 key metrics, particularly excelling in Net Margin, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Colgate-Palmolive Company's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
34.57%
Industry Style: Defensive, Dividend, Low Volatility
High GrowthEPS CAGR
28.23%
Industry Style: Defensive, Dividend, Low Volatility
High GrowthFCF CAGR
37.73%
Industry Style: Defensive, Dividend, Low Volatility
High Growth