Colgate-Palmolive (CL) Stock Analysis
Colgate-Palmolive (CL) has paid a dividend since 1895 and increased its dividend for 54 consecutive years; qualifying the company as a Dividend King, Dividend Aristocrat, and Dividend Champion.
Dividend Yield: 2.3%
Current Dividend: $1.60
Cash Flow From Operations (CFO) Per Share (ttm): $3.44
Free Cash Flow Per Share (ttm): $2.82
Market Capitalization: $62 B
Enterprise Value: $66 B
Dividend Analyzer Checklist
(updated February 2018)
Valuation Score (14/34 points)
Free Cash Flow Yield (ttm): 3.9% (9/17 points)
EV to EBIT (ttm): 19.5
EV to EBITDA (ttm): 17.0 (5/17 points)
Price to Sales Ratio (ttm): 4.2
Price to Book Value (ttm): n/a
Price to Earnings Ratio (P/E) (ttm): 32
PE 10: 33
Profitability & Growth Score (25/33 points)
Operating Earnings Yield (ttm): 5.5% (7/15 points)
Net Income (ttm): $2024 M
Gross Profit (ttm): $9280 M
Total Assets: $12775 M
Gross Profitability Ratio = GP / Total Assets: 73% (18/18 points)
Cash Return On Invested Capital (CROIC)(tttm): 38%
Return on Invested Capital (ROIC): 31%
Dividend Safety Score (12/33 points)
Dividend Payout Ratio (ttm): 76%
Cash Dividend Payout Ratio (ttm): 61% (5/12 points)
Net Financial Debt: $5147 M
Total Assets: $12775 M
Net Financial Debt / Total Assets: 40% (2/12 points)
Net Financial Debt to EBITDA (ttm): 160%
Piotroski Score (1-9) (TTM): (5/9 points)
TOTAL POINTS – (51/100) (50 is an average score)
Earnings Report: 1/26/18
Next Earnings Report: 4/27/18
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Rankings & Recommendations
(updated February 2018)
Colgate-Palmolive (CL) is ranked #202 (out of 432) overall and #21 (out of 43) in the Consumer Defensive sector by the Dividend Analyzer.
Type of Investor / Recommendation
Large Diversified Dividend Portfolios / Average Option
Looking For Exposure to Consumer Defensive Sector / Can Be Considered
Deep Value Investors / AVOID
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Sector: Consumer Defensive
Industry: Household & Personal Products
Colgate-Palmolive is a global consumer products company whose products can be found in 223 countries; almost evenly split between developed markets and emerging markets. The company operates in four core categories: Oral Care, Personal Care, Home Care, and Pet Nutrition.
Colgate has built the #1 market share worldwide by being the most recommended brand by dental professionals. Colgate toothpaste holds an astounding 44% share of the global market with the nearest competitor at 14%.
Personal Care products include Palmolive, Portex, and Softsoap brands of liquid hand soap (#1 in worldwide market share); Palmolive, Sanex, and Softsoap brand shower gels; Palmolive, Irish Spring, and Protex soaps, Speed Stick, Lady Speed Stick, Sanex deodorants and antiperspirants.
Home Care products include Palmolive and Ajax dishwashing liquids, Fabuloso and Ajax cleaners, and Murphy’s Oil Soap. Other trademarks owned by Colgate are Sorriso, Kolynos, Tom’s of Maine, Soupline, and Suavitel.
Colgate-Palmolive has the #1 market share in vet clinics. Their strategy of building relationships and credibility have build an economic moat for their products. Under Hill’s Pet Nutrition division they offer the brands Science Diet, Ideal Balance, Prescription Diet, and Healthy Advantage.
SWOT Analysis For Colgate-Palmolive
Colgate-Palmolive has been an unbelievably consistent grower over many decades. Its worldwide dominance in the oral care market share means its economic moat is deep and wide. Its successful model of developing partnerships with dentists widens that moat.
The company’s ability to build brands may be unmatched. Powerful integrated marketing communication has built a strong connection between brands and customers throughout much of the globe. Record gross margins exceeded 60% in 2016; impressive to say the least.
Since 80% of Colgate-Palmolive revenues are outside of North America, they are vulnerable to the effects of a rising dollar, foreign competitors who might squeeze high gross margins, and extraordinary events such as war or local uprisings.
Innovation that produces new products can be introduced with the power of the Colgate-Palmolive distribution system and advertising muscle.
High margins invite competition. While there might not be a global entity to challenge Colgate-Palmolive, they are confronted by numerous local or regional competitors all around the world.