You’ve probably heard of the Colgate-Palmolive company, especially if you’re a big fan of this brand of toothpaste. However, Colgate-Palmolive Company (NYSE: CL ) makes a lot more products than just toothpaste. Let’s take a look at some facts about the Colgate-Palmolive Company as well as some pros and cons of investing in the company.
When you want to invest in a company that pays dividends, you’re probably looking for continuous payments from a stock. When listed companies pay dividends, they share profits with shareholders on an ongoing basis, which may occur on a monthly, quarterly, half-yearly or annual basis, depending on the company’s performance and benefits.
A company’s board of directors must approve the dividend and will then announce when the dividend will be paid, how much each shareholder will get. They also announce the ex-dividend date. This is the date you must be a shareholder to receive the dividend.
Knowing all this, by the time you’re done reading, you’ll hopefully have a better idea of whether Colgate-Palmolive Company will meet your investment needs.
About Colgate-Palmolive Company
In 1806, Colgate-Palmolive founder William Colgate started a starch, soap and wax business in New York. In 1857, the company was reorganized as Colgate & Company. Later, BJ Johnson Soap Co. created Palmolive Soap, which today is grown in 88 countries in 54 variants.
Our MarketBeat profile shows that Colgate-Palmolive Company, still headquartered in New York, makes and sells consumer products around the world, including:
- Oral solution
- Hand soap
- Liquid hand soap
- Bubble bath
- Skin health products
- Dishwashing liquid
- Fabric softener
- House cleaner
The company’s brands include the following US and foreign-based brands:
- Toms of Maine
- Irish Spring
- Soft soap
- Lady Speed Stick
- Speed Stick
- PCA SKIN
The company works through a range of brick-and-mortar and e-commerce retailers, wholesalers and distributors, including a range of pharmaceutical products for dentists and other oral health professionals.
In addition, the company operates a pet nutrition division, which produces pet food products under the Hill’s Science Diet brand. Through the Hill’s Prescription Diet brand, the company also produces a range of therapeutic products to treat diseases in dogs and cats.
Learn more: 11 high-yielding dividend stocks
Pros and cons of investing in Colgate-Palmolive
What are the pros and cons of investing in Colgate-Palmolive Company? Let’s start with the pros and let’s start with the cons of choosing this particular dividend.
Benefits of investing in Colgate-Palmolive Company include the following:
- Dividend Advantages: According to dividend data from MarketBeat, Colgate-Palmolive Company’s dividend yield is 2.50% and its annual dividend is $1.88. There is no doubt that the Colgate-Palmolive Company takes care of its shareholders. it has offered a growing dividend over the course of 59 years, making it a dividend king. The Dividend Kings have been growing their dividend payout for at least 50 consecutive years, which makes them a reliable dividend stock if you’re an investor looking for a steady stream of income.
- Recession-proof investment: Recession-proof investments hold steady in value during a downturn in the economy. For example, consumer staples (such as groceries, household products, and other essential goods) are recession-proof. People still need everyday items like toothpaste, even in times of economic downturn. Colgate-Palmolive Company falls into the category of one type of investment that can do well in a recession.
- Household Brands: Colgate-Palmolive Company has brands that enjoy a household name with a strong reputation. The company is also diversified in many different countries. In fact, it sells its products to hundreds of other companies outside the US and derives more than half of its sales from outside the US
On the other hand, it’s also worth taking a look at the cons:
- Competing Equity Value: Colgate-Palmolive has faced problems in creating shareholder value over the past decade, challenges with organic growth, increased operating expenses, inflationary pressures, challenges with emerging markets and recently declining market shares.
- GAAP EPS decreases: In second quarter reports, GAAP EPS fell 13% to $0.72 and core business EPS fell 10% to $0.72. Ultimately, on a GAAP basis, the company expects a decline in gross margin, increased advertising spending and double-digit earnings per share growth.
- Low dividend and growth rate: The company doesn’t seem to have skyrocketed in value on its own. Ultimately, it is a low-growth stock, so it may not be the most exciting stock on the market. Additionally, its weak growth and lower dividend yield (compared to other companies in the market, that is) might give you pause.
Learn more: 10 Dividend Stocks That Will Last Forever
Is Colgate-Palmolive Company The Right Dividend King For You?
Why might you want to consider investing in a Dividend King? Dividend investors shoot for Dividend Kings companies because they pay a consistent dividend and continue to grow that dividend for years. It can be a great way to build wealth over time, take advantage of passive income, build retirement income and offset inflation during tough economic times.
A dividend investor can boost your overall return, but it’s important to choose the right type of investment for your particular needs. Colgate-Palmolive Company may not be really exciting because it is a low-growth stock with a history of stock returns. If you are looking for significant returns on capital and/or the largest dividend payout, you may want to consider other options compared to Dividend Kings. However, if you are looking for steady growth over time, it may suit your needs well.
Check out our list of Dividend Kings vs. Aristocrats, if you are interested in checking out some other high yielding stocks. Consider investing in several dividend stocks at the same time to achieve a more diversified portfolio.