Colgate Palmolive Co (CL) stock analysis

P/E above its 5-year median

Colgate Palmolive's P/E of 38.4 is above its own 5-year median of 31.8.

P/E above the industry

Colgate Palmolive's P/E of 38.4 is above the Soap, Detergents, and Cleaning Preparations; Perfumes, Cosmetics, and Other Toilet Preparations median of 29.9.

EV/EBITDA above its 5-year median

Colgate Palmolive's EV/EBITDA of 22.1 is above its 5-year median of 19.0.

P/B above the industry

Colgate Palmolive's price-to-book of 270.49 is above the Soap, Detergents, and Cleaning Preparations; Perfumes, Cosmetics, and Other Toilet Preparations median of 4.86.

Trading above fair value

The share price of $98.00 is above our fair value estimate of $76.33.

Margin of safety under 20%

The price is 28.4% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 4.3% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew 7.3% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -29.4% over the last twelve months, against a 5-year average of -4.6% a year.

Growing faster than the industry

Revenue grew 5.9% over the last twelve months; the Soap, Detergents, and Cleaning Preparations; Perfumes, Cosmetics, and Other Toilet Preparations median is 5.9%.

Guidance issued

The latest outlook (Full Year 2026 net sales, Oct 30, 2026) was issued for the first time, so it neither adds nor takes away points.

Gross margin improving

Gross margin was 60.6% over the last twelve months, against 60.1% a year earlier.

Return on equity over 15%

Return on equity was 359% over the last twelve months and averaged 687% over five years.

Return on capital over 10%

Return on invested capital was 36.1%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Colgate Palmolive's return on equity of 359% is above the Soap, Detergents, and Cleaning Preparations; Perfumes, Cosmetics, and Other Toilet Preparations median of -1.2%.

Earnings shrank over 5 years

Net income shrank 4.6% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 9.6% over the last twelve months, against a 5-year average of 11.8%.

Net margin above the industry

Colgate Palmolive's net margin of 9.6% is above the Soap, Detergents, and Cleaning Preparations; Perfumes, Cosmetics, and Other Toilet Preparations median of 0.2%.

High debt

Debt is 2494% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 988% five years ago to 2494%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 60.8% of total debt.

Interest well covered

Operating income covers interest expense 12.6 times.

Short-term assets don't cover short-term debts

Current assets are 0.96 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 7.07; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Colgate Palmolive paid dividends worth 1.6% of the share price over the last twelve months.

Yield below Treasuries

The 1.6% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Colgate Palmolive yields 1.6%.

Dividend was cut

The dividend per share fell by more than 10% at least once in the last 9 fiscal years.

Earnings cover

Needs dividends paid and net income.

Cash-flow cover

Needs dividends paid and free cash flow.