Reckitt Benckiser Group PLC ADR RBGLY

Morningstar Rating
$13.15 +0.10 (0.77%)
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Company Report

Reckitt's Innovation Pipeline for Core Brands Should Drive Superior Growth

The majority of Reckitt’s portfolio is well positioned in categories that benefit from secular growth drivers across consumer health and hygiene. The acquisition of Mead Johnson has added to its portfolio a leadership position in infant nutrition—a segment with substantial pricing power. However, the timing of the transaction, ahead of a period of declining birthrates and intensified competition in China, posed significant challenges and has dampened revenue growth in the last few years. Management sold the infant nutrition business in China in 2021, and the remaining US-focused infant nutrition business will likely be carved out once the uncertainty around the ongoing premature infant formula litigation is resolved. At the same time, we expect that further secular declines in birthrates in the US will continue to be a drag on the company’s mid-single-digit growth ambitions.

Price vs Fair Value

RBGLY is trading at a LOCK|d<NzSn premium.
Price
$13.15
Fair Value
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Uncertainty
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1-Star Price
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5-Star Price
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Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

The majority of Reckitt’s portfolio is well positioned in categories with long-term structural growth potential.

Bears

The infant nutrition segment will continue to dampen Reckitt’s growth potential, given depressed birthrates in the US.

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Trading Information

Previous Close Price
$13.05
Day Range
$13.06–13.22
52-Week Range
$12.02–17.80
Bid/Ask
$11.76 / $16.00
Shares Outstanding
3.17B
Market Cap
$42.09B
Volume/Avg
287,232 / 472,470

Key Statistics

Price/Earnings (Normalized)
17.89
Price/Sales
2.31
Dividend Yield (Trailing)
4.39%
Dividend Yield (Forward)
4.39%
Dividend Payment Schedule
Jun, Sep
Total Yield
7.57%

Company Profile

Reckitt Benckiser was formed in 1999 through the merger of the British firm Reckitt & Colman and Dutch-based Benckiser. Recently rebranded as Reckitt, it sells a portfolio that includes a variety of household and consumer health brands, such as Lysol, Finish, Durex, and Mucinex, many of which hold a number-one or number-two position in their categories globally. Reckitt has repositioned its portfolio and has entered the infant formula market through the acquisition of Mead Johnson in 2017, expanded its consumer health presence by acquiring Schiff Nutrition, K-Y, and Biofreeze, and has exited the food industry. The firm operates in 60 countries and sells products in more than 200, generating over 40% of core sales from emerging markets.
Sector
Consumer Defensive
Industry
Household & Personal Products
Stock Style Box
Large Value
Total Number of Employees
36,200

Competitors

Valuation

Metric
RBGLY
HEN3
UL
Price/Earnings (Normalized)
17.8914.8717.58
Price/Book Value
5.511.406.94
Price/Sales
2.311.432.43
Price/Cash Flow
13.0110.6219.21
Price/Earnings
RBGLY
HEN3
UL

Financial Strength

Metric
RBGLY
HEN3
UL
Quick Ratio
0.380.870.57
Current Ratio
0.591.200.74
Interest Coverage
8.8419.91—
Quick Ratio
RBGLY
HEN3
UL

Profitability

Metric
RBGLY
HEN3
UL
Return on Assets (Normalized)
9.05%6.44%—
Return on Equity (Normalized)
33.99%10.76%—
Return on Invested Capital (Normalized)
15.92%8.82%—
Return on Assets
RBGLY
HEN3
UL

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