Despite Steady Gains Since 2018, Colgate-Palmolive Stock Has Underperformed The S&P

+3.56%
Upside
77.21
Market
79.96
Trefis
CL: Colgate Palmolive logo
CL
Colgate Palmolive

Colgate-Palmolive (NYSE: CL) stock price rose almost 1.25x from $60 at 2018 end to around $73 currently, primarily due to favorable changes in its sales. During this period, the company witnessed a steady 14% rise in revenues, and combined with a 4.3% rise in its P/S multiple and a 3% drop in the outstanding share count, the company’s stock price has rallied. However, over the same period, the S&P 500 returned around 50%, meaning that CL stock has underperformed the index since 2018-end.

In our interactive dashboard, Why Colgate Palmolive Stock Moved: CL Stock Has Gained 23% Since 2018, we break down the factors behind this move.

(A) CL’s Total Revenue has grown 14% from $15.5 billion in FY 2018 to $17.7 billion on an LTM basis

  • CL’s total revenue rose steadily from $15.5 billion in FY ’18 to $17.4 billion in FY ’21, and as demand has remained strong since the pandemic, with sales rising to $17.7 billion currently.
  • Colgate-Palmolive is a leading manufacturer 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 majority of CL’s total revenue, bringing in 81% of the company’s sales, 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
Relevant Articles
  1. Colgate-Palmolive Stock Has Returned Just 6% Since Late 2017- Here’s Why
  2. Colgate-Palmolive Stock Has Underperformed The S&P Since 2018- Here’s Why
  3. Up 8% Last Month, Colgate-Palmolive Stock Looks Unlikely To Continue Its Rally
  4. Can Colgate-Palmolive Stock Sustain Its Outperformance?
  5. Colgate-Palmolive Stock Looks Unlikely To Continue Its Rally Next Month
  6. Here’s Why Colgate-Palmolive Is A Strong Consumer Bet

(B) Revenue per share (RPS) increased 20% from $18.00 in FY 2018 to $21.13 currently

  • Colgate-Palmolive revenue rose from $15.5 billion in FY ’18 to $17.7 billion currently, while the outstanding share count decreased from around 863.6 million in FY 2018 to 837.5 million currently.
  • Due to this, RPS has jumped from $18.00 in FY ’18 to $21.13 currently.

(C) Price-To-Sales (P/S) multiple for Colgate-Palmolive rose steadily from 3.3x in 2018 end to 4.4x by 2020 end but has since pulled back to 3.5x currently, still around 4% higher than what it was in late 2018

  • Colgate-Palmolive’s performance since 2018-end saw its P/S multiple rise from 3.3x in 2018 to 4.4x in 2020.
  • Despite CL’s consistent sales performance over the years, the P/S multiple has dropped to 3.5x currently due to increased uncertainty surrounding global economic conditions.
  • For additional details about the company’s historical returns and comparison to peers, see Colgate-Palmolive (CL) Stock Return.

What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

 Returns Oct 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 CL Return 3% -15% 10%
 S&P 500 Return 3% -22% 66%
 Trefis Multi-Strategy Portfolio 2% -25% 198%

[1] Month-to-date and year-to-date as of 10/19/2022
[2] Cumulative total returns since the end of 2016

Invest with Trefis Market Beating Portfolios
See all Trefis Price Estimates