Colgate-Palmolive: A Steady Company, But I'm Not Buying. Yet

Dividend | Stock | Investing | Valuation

Consumer staples businesses have historically made very attractive dividend growth investments. That's largely due to the substantial amount of repeat purchases as well as their ability to pass on modest price increases over time.

Colgate-Palmolive (CL) is a prime example of just how powerful consumer staples companies can be. What the combination of modest price increases coupled with expansion into additional end markets can do for investors.

Colgate-Palmolive is a leader in its categories with estimates of 1/3 of worldwide toothpaste market share which is 2.5x the next largest competitor. That market share dominance gives Colgate Palmolive significant advantages around its business, primarily in lower costs and its solid brand power, that allows it to generate high free cash flow.

Dividend History

Focusing your investment strategy on dividend growth companies is not a catch all to guarantee you won't suffer investment losses. However, I do believe that it will help narrow your search for quality companies down to a more manageable amount. Companies with lengthy dividend growth histories are likely high quality businesses that have some kind of moat around their business that has allowed them to raise dividends in the past.

Colgate Palmolive Dividend HistoryImage by author; data source Colgate Palmolive's Investor Relations

According to the CCC list, Colgate-Palmolive is a Dividend Champion with 57 consecutive years of dividend growth. That's every year since 1964 that Colgate-Palmolive has been paying out higher dividends and puts them in rare company.

dividend stock analysis, DIY, value investing, long term investing


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