Colgate-Palmolive Offers 2.6% Dividend Yield, 55 Consecutive Annual Dividend Hikes (CL)
By: Ned Piplovic,
Featured image source: www.colgatecommercial.com; All brands and logos are registered trademarks of the The Colgate-Palmolive Company
While the current dividend yield is nothing extraordinary, the company’s record of 55 consecutive annual hikes certainly stands out among dividend-paying equities. Even among the elite group of 51 companies designated as Dividend Aristocrats, only six companies have had longer streaks of consecutive annual dividend hikes. The Dividend Aristocrats are S&P 500 companies with a market capitalization of more than $3 billion that have raised their annual dividend for least 25 consecutive years. Furthermore, because of its record of more than 50 consecutive annual dividend increases, the Colgate-Palmolive Company also qualifies — with only 15 other companies — for the highly selective label of a Dividend King.
Colgate-Palmolive’s share price declined more than 20% in the first half of 2018. However, this drop might be a mere correction as the share price has recovered nearly a quarter of its losses since mid-May 2018. Additionally, the share price has more than doubled over the past decade and has risen at a relatively stable pace with minimal volatility.
The current share price pullback might be an opportunity for investors who missed the decade-long capital growth and dividend income to add shares of Colgate-Palmolive as a long-term growth core of their investment portfolio. Investors that decide to invest in, or expand their existing position in Colgate-Palmolive, should act before the next ex-dividend date on October 18, 2018, to ensure eligibility for the next round of dividend distributions on the November 15, 2018, pay date.
The Colgate-Palmolive Compan (NYSE:CL)
Founded in 1806 and headquartered in New York City, the Colgate-Palmolive Company manufactures and sells consumer products worldwide. The company operates through three business segments, Oral, Personal and Home Care, and Pet Nutrition. The company offers oral care products, including toothpastes, toothbrushes and mouthwashes, as well as pharmaceutical products for dentists and other oral health professionals. Additionally, the company develops and manufactures personal care products that include bar and liquid hand soaps, shower gels, shampoos, conditioners, deodorants and antiperspirants. The home care segment of the company’s product portfolio includes laundry and dishwashing detergents, fabric conditioners, household cleaners, bleaches and other related products. Additionally, the company’s Pet Nutrition segment provides pet products for everyday nutritional needs, a range of therapeutic products to manage disease conditions and various products with natural ingredients.
The business unit also markets and sells its pet nutrition products for dogs and cats through pet supply retailers and veterinarians. The company markets and distributes its product under many well-known, household brands and trademarks, which include Colgate, Palmolive, Speed Stick, Lady Speed Stick, Softsoap, Irish Spring, Protex, Tom’s of Maine, Sanex, Ajax, Soupline and Suavitel, as well as Hill’s Science Diet, Hill’s Prescription Diet and Hill’s Ideal Balance.
The company’s share price experienced a slightly higher level of volatility in the past two years than it did over the past decade. After rising more than 7% early in the trailing 12 months, the share price reached briefly a new all-time high of $77.50 on January 16, 2018. However, the peak did not last long. The share price reversed direction and declined more than 20% before bottoming out at its 52-week low of $61.65 on May 15, 2018. After another direction change, the share price resumed it uptrend and closed on October 9, 2018 at $65.07. This closing price was approximately 10% lower than it was 12 months earlier but 5.5% above the 52-week low from mid-May 2018.
While its share price encountered some headwinds in the first half of 2018, the company continued providing a steadily rising dividend income to its shareholders. The company has been paying distributions every year since 1895 and has offered an annual dividend hike every year since 1963. Just over the past 20 years, Colgate-Palmolive advanced its total annual dividend payout six-fold, which is equivalent to an average annual growth rate of 9.5%.
The company’s current $0.42 quarterly dividend payout is 5% higher than the $0.40 amount from the same period last year. This current payout is equivalent to a $1.68 annualized payout and a 2.6% forward dividend yield, which is 17.4% higher than the company’s own 2.2% average dividend yield over the past five years. Additionally, the company’s current 2.6% dividend yield is nearly 25% above the 2.07% average yield of the entire Consumer Goods sector, as well as 8% above the 2.39% average dividend yield of all the companies in the Personal Products market segment.
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Ned Piplovic is the assistant editor of website content at Eagle Financial Publications. He graduated from Columbia University with a Bachelor’s degree in Economics and Philosophy. Prior to joining Eagle, Ned spent 15 years in corporate operations and financial management. Ned writes for www.DividendInvestor.com and www.StockInvestor.com.