Colgate-Palmolive probably needs no introduction to most investors. The company was founded in 1806. Today, it is one of the dominant oral care companies in the world. It sells toothpaste, toothbrushes, mouthwash, etc., under the Colgate brand name. Besides Oral, the company operates in the Personal and Home Care and Pet Nutrition segments. The leading brands are Colgate, Palmolive, Darlie, Tom's of Maine, Softsoap, Irish Spring, Speed Stick, Ajax, Hill's Science, etc.
Total revenue was $17,967 million in 2022 and the past twelve months.
According to Stock Rover*, the stock price is down (-8.6%) year-to-date ad fell (-9.8%) in the trailing 1-year after adjusting for dividends reinvested. The stock price is descending because demand is normalizing as more consumers return to the office. For perspective, the S&P 500 Index was down (-18.1%) in 2022.
Colgate's competitive advantage is its scale and size, leading to manufacturing, distribution, and marketing cost efficiencies. Next, it is the global market leader for toothpaste, with 40% of the market, and owns other dominant brands. Also, the firm has a solid track record for innovation.
The forward dividend yield is around 2.63%, above the 5-year average of 2.40%. The yield was only higher a couple of times in the past decade. The payout ratio is slightly elevated at 62%, but Colgate has high recurring earnings and cash flow streams, mitigating risk.
Source: Portfolio Insight*
Colgate is one of the longest dividend paying stocks. Further, it is a Dividend King with a 60-year streak. The growth rate is now in the low-to-mid single digits. The last quarterly dividend increase was to $0.47 from $0.45 per share in March 2022. Investors should expect another increase at the end of the first quarter.
Colgate is fairly valued now, with a forward P/E ratio of ~23.1X. But the stock is rarely undervalued except during recessions.
Disclosure: Long CL
Disclaimer: The author is not a licensed or registered investment adviser or broker/dealer. He is not providing you with individual investment advice. Please consult with a licensed investment professional before you invest your money.