You’ve probably heard of the Colgate-Palmolive company, especially if you’re a big fan of that brand of toothpaste. however, the Colgate Palmolive Company (NYSE:CL) produces so much more products than just toothpaste. Let’s look at some facts about Colgate-Palmolive Company and some of the pros and cons of investing in the company.
When you want to invest in a company that pays dividends, you are probably looking for recurring payments from a stock. When publicly traded companies pay dividends, they share profits with shareholders on an ongoing basis, which can be on a monthly, quarterly, semi-annually, or annual basis, depending on the company’s performance and prerogatives.
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 receive. They also disclose the ex-dividend date. This is the date on which you must be a shareholder to receive the dividend.
Knowing all this, hopefully by the time you finish reading you will have a better idea of whether the Colgate-Palmolive Company will meet your investment needs.
About Colgate-Palmolive Company
In 1806, Colgate-Palmolive Company founder William Colgate started a starch, soap and candle company in New York City. In 1857 the company was reorganized as Colgate & Company. Later, the BJ Johnson Soap Co. Palmolive Soap, which is currently being developed in 54 variants in 88 countries.
U.S MarketBeat profile demonstrates that Colgate-Palmolive Company, still headquartered in New York City, manufactures and sells consumer products worldwide, including:
- bar hand soap
- Liquid hand soap
- Shower gel
- Skin health products
- washing up liquid
- fabric softener
- Household cleaner
The company’s brands include the following US-based and foreign brands:
- Tom’s of Maine
- Irish Spring
- Soft soap
- Lady Speed Stick
- speed stick
- PCA SKIN
- soup line
The company operates through a range of traditional 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 food segment, which produces pet food products under the Hill’s Science Diet brand. Through the Hill’s Prescription Diet brand, the company also manufactures a range of therapeutic products for the treatment of disease in dogs and cats.
Learn more: 11 high-yielding dividend stocks
Pros and Cons of Investing in Colgate-Palmolive Company
What are the pros and cons of investing in Colgate-Palmolive Company? Let’s start with the pros and start with the cons of choosing this particular dividend stock.
The benefits of investing in Colgate-Palmolive Company include:
- Dividend benefits: According to MarketBeat Dividend DataColgate-Palmolive Company’s dividend yield is 2.50% and its annual dividend is $1.88. There is no doubt that Colgate-Palmolive Company cares for its shareholders; it has offered a rising dividend over the course of 59 years, meaning it is a Dividend king. The Dividend Kings increase their dividend payments for at least 50 consecutive years, making them reliable dividend stocks if you are an investor looking for a stable income stream.
- Recession-proof investment: Recession-proof investments remain stable in value during a downturn in the economy. For example, basic consumer goods (such as groceries, household products and other necessary goods) are recession-proof. People still need everyday things like toothpaste even during recessions in the economy. The Colgate-Palmolive Company fits into the category of a type of investment that can do well in a downturn.
- Household brands: The Colgate-Palmolive Company has brands that are well known with a strong reputation. The company is also diversified across many different countries. In fact, it sells its products in hundreds of other companies outside the US and gets more than half of its sales outside the US.
On the other hand, it is also worth looking at the disadvantages:
- Struggling shareholder value: Colgate-Palmolive has had issues over the past decade with shareholder value creation, organic growth challenges, higher operating expenses, inflationary pressures, emerging market challenges and recently declining market shares.
- GAAP EPS Decreases: In the Q2 reports, GAAP EPS fell 13% to $0.72 and basic corporate EPS fell 10% to $0.72. Ultimately, on a GAAP basis, the company expects a decline in gross profit margin, higher advertising investment and double-digit earnings per share growth.
- Low dividend and growth rate: The company doesn’t seem to have what it takes to skyrocket in value. Ultimately, it’s a low-growth stock, so it might not be the most exciting stock on the market. In addition, the moderate growth and lower dividend yield (compared to other companies in the market) may give you a break.
Learn more: 10 Dividend Stocks To Hold On To Forever
Is the Colgate-Palmolive Company the Right Dividend King for You?
Why should you consider investing in a Dividend King? Dividend investors target the Dividend Kings companies because they pay a constant dividend and continue to increase that dividend over a number of years. It can be a great way to build wealth over time, take advantage of passive income, generate income for retirement, and offset inflation in tough economic times.
A dividend investor can increase your total return, but it’s important to choose the right type of investment for your specific needs. The Colgate-Palmolive Company may not be particularly exciting because it is a low-growth stock with a yo-yo history of stock returns. If you are looking for large returns on capital and/or the largest dividend payout, you may want to look at other options compared to the Dividend Kings. However, if you are looking for steady growth over time, this could suit your needs well.
Consider the list of Dividend Kings vs. Aristocrats if you are interested in checking out some other high performing stocks. Consider investing in multiple dividend stocks at once for a chance at a more diversified portfolio.