Reckitt Benckiser Group PLC
🇬🇧 RKT.LSE · London · GB00B24CGK77
Consumer
GBX 5188.00 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
10.7
P/E (Price-to-Earnings)Shows how much investors pay for each $1 of profit. We display the TTM P/E (Trailing Twelve Months) which uses actual earnings from the last 4 quarters. This is more reliable than Forward P/E which uses analyst estimates.
Calculation: 5188.00 ÷ 486.62 = 10.7
TTM period through: 2025-12-31
Forward P/E (estimated): 14.1
Based on analyst estimates
Reference: Provider P/E (Trailing): 10.6
Yield (Fwd)
4.16%
Dividend YieldThe Forward yield (Fwd) shows the next announced annual dividend / current price — what you'd earn going forward. The Trailing yield (TTM) in the tooltip shows dividends actually paid in the last 12 months. Forward is shown as primary because it reflects the company's current commitment to shareholders.
Trailing Yield (TTM): 4.09%
Net Debt/EBITDA (TTM)
1.5x
Latest quarter: 2.4x
Net Debt / EBITDAA leverage ratio showing how many years of EBITDA (earnings before interest, taxes, depreciation, and amortization) it would take to repay net debt. EBITDA approximates operating cash generation. Lower ratios (e.g., <3x) are generally safer; higher (e.g., >5x) may indicate more financial risk.
TTM through: 2025-12-31
Latest quarter (2025-12-31): 2.4x
The quarterly value can spike when quarterly EBITDA is very low (e.g., one-time charges).
Quick guide: <2x manageable, >4x can be risky (sector-dependent).
Payout (Fwd)
44.4%
Payout RatioDividends as a percentage of earnings. The Forward payout (Fwd) uses the announced dividend divided by actual past earnings (TTM) — it tells you if the company can afford what it promised. Very high payouts can be risky, especially if profits fall.
Announced dividend / actual earnings (TTM)
Payout (TTM): 44.1%
Cash Flow Payout (TTM): 61.1%
FCF Coverage (TTM): 1.26x
ROE
44.2%
ROE (Return on Equity)A profitability measure: how much profit is generated from shareholders’ equity. Higher isn’t always better if it comes from high debt.
EV/EBITDA
8.4x
EV/EBITDAA valuation ratio that compares total business value (including debt) to EBITDA. Lower can mean cheaper, but context matters.
Summary
Reckitt Benckiser is a world-class consumer staples giant with a deep portfolio of essential health and hygiene brands that provide highly resilient cash flows. The current valuation near GBX 5,188 (P/E 10.6, 4.1% yield) reflects an overreaction to near-term macro headwinds, placing the stock well below fair value estimates typically assigned to defensive market leaders. Worth considering for new positions at current levels, offering an excellent margin of safety and reliable income for long-term dividend investors.
Sector Context
Reckitt Benckiser manufactures and distributes essential health, hygiene, and household cleaning products globally, boasting dominant brands like Lysol, Dettol, and Finish. In the context of dividend investing, consumer staples are highly prized defensive assets; their everyday utility generates highly predictable, non-cyclical cash flows capable of supporting steady, growing dividends through all economic environments.
Temporary Opportunity Identified
Valuation multiples are artificially compressed due to a combination of legacy litigation overhangs, recent flat volume growth in developed markets (Europe/US), and macroeconomic fears. The underlying business model and brand dominance (e.g., Finish, Dettol) remain completely intact.
📊 Strategy Analysis
- • Trading at a highly attractive TTM P/E of 10.66, significantly below the typical 15-20x premium historically awarded to global consumer staple monopolies.
- • Offers a secure 4.09% dividend yield backed by an excellent 61% cash flow payout ratio and 1.26x free cash flow coverage, highlighting robust distribution safety.
- • Balance sheet strength has dramatically improved, with Net Debt/EBITDA successfully deleveraged down to a very safe 1.54x (from 17.9x in 2019).
- • Exceptional profitability metrics with a 29.7% EBITDA margin and a 44.2% Return on Equity (ROE), underscoring the pricing power of its core brand portfolio.
⚠ What to Watch
- • Top-line revenue growth remains sluggish with a 5-year CAGR of just 1.4%, reflecting mature markets and shifting consumer demand.
- • Recent management commentary and analyst notes highlight softening consumer demand in the US and flat expectations for European markets.
- • Heightened geopolitical tensions and elevated oil prices could temporarily reintroduce input cost inflation, threatening near-term gross margins.
📊 Historical Trends (10 Years)
Powered by EODHDThese charts show how key metrics have evolved over the past decade, helping you identify if the company is improving or deteriorating.
Debt Evolution (Net Debt / EBITDA)
Lower values are better. A declining trend indicates the company is reducing its debt (deleveraging).
Revenue & Earnings Growth
Consistent growth in revenueRevenue
The money a company brings in from selling its products or services. It’s the top line before costs. (blue) and earningsEarnings (Profit)
What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss. (green) indicates a healthy business. Look for upward trends and recoveries after temporary dips.
Dividend Sustainability (FCF vs Dividends Paid)
Free cash flowFree Cash Flow
Cash left after the company pays for running the business and maintaining it. Often used to fund dividends, pay debt, or buy back shares. (FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., blue) should cover dividends paidDividends Paid
Cash the company paid out to shareholders. It’s not guaranteed and can change over time. (green). If dividends consistently exceed FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., the dividend may be at risk.
Analysis date: 2026-04-05
Disclaimer: This information is for educational purposes only. Not financial advice.