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Colgate-Palmolive (CL) Stock Analysis
Colgate-Palmolive (CL) has paid a dividend since 1895 and increased its dividend for 59 consecutive years; qualifying the company as a Dividend King, Dividend Aristocrat, and Dividend Champion.
Current Dividend Annualized: $1.88
Colgate-Palmolive (CL) Intrinsic Value – Margin of Safety Analysis
(updated November 2022)
Normalized Diluted Earnings Per Share (TTM): $2.29
Free Cash Flow Per Share (TTM): $2.83
Cash Flow From Operations (CFO) Per Share (TTM): $3.57
Estimated Intrinsic Value: $55
Target Buy Price Based on Required Margin of Safety = $50
(Required Margin of Safety Based On Risk Stability Grade:
A = 10%, B = 20%, C = 30%, D = 40%, F = 50%)
Target SELL Price Based on Estimated Intrinsic Value = $66
(Allow Overvaluation Adjusted by Risk Stability Grade:
A = 20%, B = 15%, C = 10%, D = 5%, F = 0%)
Risk / Stability Grade: A
A grade indicates a quality company with a strong balance sheet, high earnings quality, and a positive business environment. These stocks require the slimmest margin of safety within the stock universe.
B grade indicates a company with a good balance sheet, good earning quality, and a stable business environment. The margin of safety required should be greater than stocks with an A grade but less than the average stock.
C grade indicates a company with a sufficient balance sheet, at least average earnings quality, and a reasonably stable business environment. The margin of safety required is greater than A & B stocks, but less than D & F stocks.
D grade indicates a company in good standing but has issues that could affect its stability and long term risks. D rated stocks should require a large margin of safety when purchased.
F grade indicates a company with significant issues that are currently affecting its stability and long term risks. Require an extremely large margin of safety for F rated stocks when purchased.
Financial Risk Grade: A
A grade indicates an extremely low probability of a dividend cut. This rating is reserved for companies with strong balance sheets and/or excellent dividend histories.
B grade indicates a very low probability for a dividend cut.
C grade indicates a low probability for a dividend cut and/or average safety risk.
D grade indicates there are issues that should be considered concerning future dividend payments.
F grade indicates serious dividend safety risks. Investors should complete comprehensive due diligence before investing.
Business Quality Grade: A
A grade indicates earnings quality is high or far above average.
B grade indicates earnings quality is good and/or above average.
C grade indicates earnings quality is acceptable or average.
D grade indicates earnings quality is poor and requires thoughtful due diligence.
F grade indicates the quality of the earnings is poor or far below average requiring serious due diligence.
Earnings Report: 9/30/22
AAAMP Portfolios Position Disclosures:
Dividend Growth & Income – None
Treasure Trove Dividend – None
Global Dividend Balanced – None
Global Value – None
Global Value Aggressive – None
Global High Yield – None
Sector: Consumer Defensive
Industry: Household & Personal Products
- Since its founding in 1806, Colgate-Palmolive has grown to become a leading global consumer product company.
- In addition to its namesake oral care line, the firm manufactures shampoos, shower gels, deodorants, and home care products that are sold in over 200 countries around the world (international sales account for about 70% of its consolidated total, including approximately 50% from emerging regions).
- It also owns specialty pet food maker Hill’s, which sells its products through veterinarians and specialty pet retailers.
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.
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.
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While Arbor Investment Planner has used reasonable efforts to obtain information from reliable sources, we make no representations or warranties as to the accuracy, reliability, or completeness of third-party information presented herein. The sole purpose of this analysis is information. Nothing presented herein is, or is intended to constitute investment advice. Consult your financial advisor before making investment decisions.