📊 CL Key Takeaways
Is Colgate Palmolive Co (CL) a Good Investment?
Colgate Palmolive exhibits concerning financial distress with stockholders' equity of only $54M against $16B in assets, resulting in a mathematically impossible 3948% ROE that signals severe balance sheet deterioration. The company maintains strong operational cash generation ($4.2B) and healthy margins, but the extreme leverage (145x debt-to-equity) and liquidity crisis (0.83x current ratio) indicate structural financial stress that outweighs operational strength.
Colgate-Palmolive shows strong underlying profitability and cash generation, with 60.1% gross margin, 16.2% operating margin, and $3.63B of free cash flow on modest 1.4% revenue growth. However, growth quality is only moderate because net income was flat, diluted EPS fell sharply, and the balance sheet is stretched with very low equity, sub-1.0 liquidity, and elevated leverage. The business appears fundamentally resilient, but financial flexibility is a key constraint.
Why Buy Colgate Palmolive Co Stock? CL Key Strengths
- Strong operating cash flow of $4.2B with 17.8% FCF margin demonstrates core business generates substantial cash
- Solid profitability metrics with 60.1% gross margin and 16.2% operating margin showing pricing power and cost management
- Adequate interest coverage of 11.1x indicates ability to service debt despite high leverage
- High and durable profitability with strong gross, operating, and net margins
- Robust cash generation with $4.20B operating cash flow and 17.8% free cash flow margin
- Solid debt servicing capacity with 11.1x interest coverage
CL Stock Risks: Colgate Palmolive Co Investment Risks
- Critical balance sheet deterioration with stockholders' equity of only $54M, creating severe solvency risk and potential covenant violations
- Extreme leverage of 145x debt-to-equity ratio indicates highly unstable capital structure unsustainable long-term
- Deteriorating liquidity with current ratio of 0.83x and quick ratio of 0.54x suggesting inability to meet near-term obligations
- EPS declined 25.1% YoY despite flat net income growth, indicating significant shareholder dilution from equity restructuring
- Minimal revenue growth of 1.4% YoY combined with financial distress limits strategic flexibility
- Extremely thin equity base makes leverage metrics and capital structure risk unusually high
- Weak liquidity profile with 0.83x current ratio and 0.54x quick ratio
- Low growth quality as revenue growth is modest, net income is flat, and diluted EPS declined 25.1%
Key Metrics to Watch
- Stockholders equity trend and any debt restructuring announcements
- Quarterly operating cash flow sustainability and capital allocation priorities
- Current and quick ratios for signs of liquidity improvement or deterioration
- Debt-to-EBITDA ratio and refinancing activity given high leverage
- EPS trajectory given recent 25% decline
- Free cash flow conversion and operating cash flow trend
- Net income and diluted EPS trend relative to debt levels and equity position
Colgate Palmolive Co (CL) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The current ratio below 1.0x warrants monitoring of short-term liquidity.
CL Profit Margin, ROE & Profitability Analysis
CL vs Consumer Sector: How Colgate Palmolive Co Compares
How Colgate Palmolive Co compares to Consumer sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Colgate Palmolive Co Stock Overvalued? CL Valuation Analysis 2026
Based on fundamental analysis, Colgate Palmolive Co has mixed fundamental signals relative to the Consumer sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Colgate Palmolive Co Balance Sheet: CL Debt, Cash & Liquidity
CL Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Colgate Palmolive Co's revenue has grown significantly by 17% over the 5-year period, indicating strong business expansion. The most recent EPS of $2.77 reflects profitable operations.
CL Revenue Growth, EPS Growth & YoY Performance
CL Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $5.0B | $735.0M | $0.90 |
| Q2 2025 | $5.1B | $731.0M | $0.89 |
| Q1 2025 | $4.9B | $683.0M | $0.83 |
| Q3 2024 | $4.9B | $708.0M | $0.86 |
| Q2 2024 | $4.8B | $502.0M | $0.60 |
| Q1 2024 | $4.8B | $372.0M | $0.45 |
| Q3 2023 | $4.5B | $618.0M | $0.74 |
| Q2 2023 | $4.5B | $502.0M | $0.60 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Colgate Palmolive Co Dividends, Buybacks & Capital Allocation
CL SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Colgate Palmolive Co (CIK: 0000021665)
📋 Recent SEC Filings
❓ Frequently Asked Questions about CL
What is the AI rating for CL?
Colgate Palmolive Co (CL) has a Combined AI Rating of SELL from Claude (SELL) and ChatGPT (HOLD) with 82% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are CL's key strengths?
Claude: Strong operating cash flow of $4.2B with 17.8% FCF margin demonstrates core business generates substantial cash. Solid profitability metrics with 60.1% gross margin and 16.2% operating margin showing pricing power and cost management. ChatGPT: High and durable profitability with strong gross, operating, and net margins. Robust cash generation with $4.20B operating cash flow and 17.8% free cash flow margin.
What are the risks of investing in CL?
Claude: Critical balance sheet deterioration with stockholders' equity of only $54M, creating severe solvency risk and potential covenant violations. Extreme leverage of 145x debt-to-equity ratio indicates highly unstable capital structure unsustainable long-term. ChatGPT: Extremely thin equity base makes leverage metrics and capital structure risk unusually high. Weak liquidity profile with 0.83x current ratio and 0.54x quick ratio.
What is CL's revenue and growth?
Colgate Palmolive Co reported revenue of $20.4B.
Does CL pay dividends?
Colgate Palmolive Co does not currently pay dividends.
Where can I find CL SEC filings?
Official SEC filings for Colgate Palmolive Co (CIK: 0000021665) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is CL's EPS?
Colgate Palmolive Co has a diluted EPS of $2.63.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is CL a good stock to buy right now?
Based on our AI fundamental analysis in April 2026, Colgate Palmolive Co has a SELL rating with 82% confidence. Review the strengths and risks sections above before making a decision. This is not investment advice.
Is CL stock overvalued or undervalued?
Valuation metrics for CL: ROE of 3,948.1% (sector avg: 18%), net margin of 10.5% (sector avg: 8%). Higher ROE suggests strong returns relative to peers.
Should I buy CL stock in 2026?
Our dual AI analysis gives Colgate Palmolive Co a combined SELL rating for 2026. Revenue is data pending, with profitability above sector average. Always conduct your own research.
What is CL's free cash flow?
Colgate Palmolive Co's operating cash flow is $4.2B, with capital expenditures of $564.0M. FCF margin is 17.8%.
How does CL compare to other Consumer stocks?
Vs Consumer sector averages: Net margin 10.5% (avg: 8%), ROE 3,948.1% (avg: 18%), current ratio 0.83 (avg: 1.5).
Is Colgate Palmolive Co carrying too much debt?
CL has a debt-to-equity ratio of 145.17x, which is above the Consumer sector average of 0.8x. Combined with a current ratio below 1, this warrants careful monitoring of the balance sheet.
Why is CL's return on equity (ROE) so high?
Colgate Palmolive Co has a return on equity of 3,948.1%, significantly above the Consumer sector average of 18%. A high ROE indicates the company is efficient at generating profits from shareholder equity. This is supported by a 10.5% net margin.