* Note: Prices are in Million (M) USD.
Description:
Colgate-Palmolive Company is an American multinational consumer products company headquartered on Park Avenue in Midtown Manhattan, New York City. It specializes in the production, distribution and provision of household, health care, personal care and veterinary products.
These criteria used Company's Cash, EBITDA and Debt balance to determines its fair value:
Cash : $1,215 M
Debt : $8,758 M
EBITDA : $4,796 M
Net Debt (Debt - Cash): $7,543 M
Since Net Debt is covered by EBITDA within 2 years, 2 points assigned.
This criteria used industry in which company operates:
Sector: Consumer defensive
Industry: Household & personal products
Based on industry, 3 points assigned.
This criteria used Company's Price To Earning (P/E) Ratio to determines its fair value:
Forward PE Ratio: 21.95
Since Forward PE Ratio is between 20 - 25, 2 points assigned.
This criteria used Company's ability to convert Sales into free cash flow to determine fair value:
Using last 20 overlapping fiscal years (max 20).Average Free Cash Flow: $2,432 M
Average Revenue: $16,075 M
Revenue Converted To Free Cash Flow (%): 15.1%
Since Free Cash Flow (FCF) to Revenue percentage is greater than 15, 3 points assigned.
This criteria used company's growth potential to calculate its fair value:
Latest Revenue (2024-12-31): $20,101 M
Revenue 4 Years Ago (2020-12-31): $16,471 M
Last 5 Years Average Revenue Growth: 4%
Since Revenue Growth is between 0 - 5, 1 point assigned.
This criteria used Company's ability to buy back its own share:
Latest Share Count (2024-12-31): $823 M
Share Count 5 Years Ago (2020-12-31): $859 M
Company is buying back its own shares, 3 points assigned.
This criteria used Company's dividend payout ratio to determine its fair value:
Next Year Earnings Per Share (EPS): $3.90
Trailing 12-Month Earnings Per Share (EPS): $3.70
Average Earnings Per Share (EPS): $3.80
Dividend Per Share (DPS): $2
Payout Ratio: 53%
Dividend Yield: 2%
Since company Payout Ratio is greater than 50, 1 point assigned.
Since Dividend Yield is greater than 2, 2 points assigned.
This criteria used Company's Return On Equity (ROE%) to determine its fair value:
Using last 16 valid ROE years (max 20).Average ROE: 372.5%
Since Average ROE is greater than 20, 5 points assigned.
This criteria used Company's current price to its 52 week low price to determines its fair value:
Current Price: $83
52-Week Low: $82
Threshold Price (15% Above 52-Week Low): $95
Since Current price is within 15% threshold, 5 points assigned.
This criteria used Company's Market Cap to determines its fair value:
Market Capitalization: $68,675 M
Since Market Cap is between 10B - 100B, 2 points assigned.
% Exposure to Total Portfolio
Based on the market cap, we recommend do not exceed 3% exposure of Total Portfolio.
Value-Trade has assigned 29 points to above Colgate-Palmolive Company (CL) stock.
Heads up: One or more P/E inputs look exaggerated and may skew the blend.
• ROE Based PE
50.00 (>2× median)
Further research is recommended; please use your own due diligence.In such cases, multiplying earnings by the long-run average P/E typically gives a closer, more reliable fair value.
Rule of thumb: Last 20 Years Avg P/E (30.41)
× EPS ($3.80) = $115.56.
Last 20 Years Avg PE 30.41, Fair Value PE 15, Industry Based PE 23, Growth Based PE 4, RCFC Based PE 22.1, ROE Based PE 50, Risk-Free Anchored PE (25% MoS) 17.08. Based on these 7 values, average assigned is 23.08. Value-Trades has assined P/E value 23.08. Since an average (Current Year EPS + Next Year EPS) earning per share is $3.8.
The fair value of Colgate-Palmolive Company (CL) stock should be (23.08 x $3.8) = $87.72.
