Colgate-Palmolive Stock Has Underperformed The S&P Since 2018- Here’s Why

CL: Colgate Palmolive logo
Colgate Palmolive

Colgate-Palmolive’s (NYSE: CL) stock price rose just 1.32x from around $60 in 2018 end to $79 currently, primarily due to favorable changes in its P/S multiple. During this period, the company also witnessed a 12% rise in revenues and a 4% drop in the outstanding share count. While the company’s stock price has risen, it has underperformed the S&P 500, which returned around 60% over the same period.

In our interactive dashboard, Why Colgate-Palmolive Stock Moved: CL Stock Has Gained 32% Since 2018, we break down the factors behind this move.

(A) CL’s Total Revenue has risen 12% from $15.5 billion in FY 2018 to $17.5 billion currently

  • CL’s total revenue rose steadily from $15.5 billion in FY ’18 to $16.5 billion in FY ’20, and demand has picked up strongly since the pandemic, with sales rising to $17.5 billion currently.
  • Colgate-Palmolive is a leading producer and distributor of household, health care, personal care, and veterinary products, operating in markets across the world.
  • As of FY ’21, Oral, Personal and Home Care sales make up the bulk of CL’s total sales at 81%, with Pet Nutrition making up the remaining 19%.
  • For additional details about CL’s revenues and comparison to peers, see Colgate-Palmolive (CL) Revenue Comparison
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(B) Revenue per share (RPS) increased 17% from $17.88 in FY 2018 to $20.95 currently

  • CL’s revenue rose from $15.5 billion in FY 2018 to $17.5 billion currently, while the outstanding share count dropped from 869.6 million in FY 2018 to around 834.3 million currently.
  • Due to this, RPS has risen 17% from $17.88 in FY ’18 to $20.95 currently.

(C) Price-To-Sales (P/S) multiple for CL rose strongly from 3.2x in 2018 to 4.4x by 2020 end but has pulled back to 3.8x currently, still 1.2x higher than its 2018 level

  • CL’s P/S multiple rose strongly to around 4.4x by late 2020, on the back of rising investor expectations surrounding increased demand for its products, leading to a rise in the company’s sales.
  • However, due to the increased economic uncertainty weighing on the broader markets, the P/S multiple has pulled back, currently standing at around 3.8x.
  • For additional details about the company stock returns and comparison to peers, see Colgate-Palmolive (CL) Stock Return Comparison.

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Returns Jun 2022
MTD [1]
YTD [1]
Total [2]
 CL Return 0% -8% 20%
 S&P 500 Return 0% -13% 85%
 Trefis Multi-Strategy Portfolio 1% -18% 223%

[1] Month-to-date and year-to-date as of 6/1/2022
[2] Cumulative total returns since the end of 2016

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