Colgate-Palmolive (CL) is a stock with great brand awareness due its namesake toothpaste. The stock is one that I wished I had bought and held many, many years ago instead of only a few years ago. I was waiting for the valuation to drop. That said, Colgate is rarely undervalued or in bear market territory. Some investors wait for the yield to go up over 3%. But it rarely happens for Colgate. The yield has not been over 3% in the past decade and the closest it got was about 2.8%. The stock price did drop about 20% at the stock market’s nadir in late-March 2020 during the COVID-19 pandemic, which was an opportunity.
Today, Colgate’s stock price is down about -12% year-to-date as investors rotate out of consumer staples and defensive stocks on rising vaccine distribution. Colgate is a slow-and-steady dividend growth stock, but it is a Dividend King with 58 years of dividend growth. If a Dividend King is in correction territory, I always do more research. Colgate is generating solid organic sales growth with leading global market share in toothpaste and other categories and arguably has a wide moat. I view Colgate-Palmolive as a long-term buy.
Overview of Colgate-Palmolive – Buy on Weakness
Colgate-Palmolive traces its founding to 1806. Today, the company is one of the leading consumers products companies in the world with sales in over 200 countries. The company operates globally in two business segments with four core categories: Oral, Personal, and Home Care; and Pet Nutrition. Colgate owns many well-known brands including Colgate, Palmolive, Tom’s of Maine, meridol, Speed Stick, Lady Speed Stick, Softsoap, Irish Spring, Sanex, Ajax, Hill’s (pet food) and many others. Colgate is No. 68 on Interbrands list of 100 Best Global Brands in 2020. Colgate owns the global No. 1 or No. 2 brands in toothpaste, manual toothbrushes, mouthwash, liquid hand soap, bar soaps, liquid body cleansing, liquid fabric conditioners, and hand dishwashing. Colgate had $16,471M in revenue in 2020 of which over 60% is from outside North America.
Disclosure: Long CL
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Prakash Kolli is the founder of the Dividend Power site. He is a self-taught investor, analyst, and writer on dividend growth stocks and financial independence. His writings can be found on Seeking Alpha, InvestorPlace, Business Insider, Nasdaq, TalkMarkets, ValueWalk, The Money Show, Forbes, Yahoo Finance, and leading financial sites. In addition, he is part of the Portfolio Insight and Sure Dividend teams. He was recently in the top 1.0% and 100 (73 out of over 13,450) financial bloggers, as tracked by TipRanks (an independent analyst tracking site) for his articles on Seeking Alpha.