Our analysis is based on comparing Colgate-Palmolive Co. with the following peers – Clorox Company, Procter & Gamble Company, Church & Dwight Co., Inc., Avon Products, Inc., Unilever PLC Sponsored ADR, Reckitt Benckiser Group plc, Kao Corp. Sponsored ADR, CCA Industries, Inc., Kimberly-Clark Corporation and Beiersdorf AG Unsponsored ADR (CLX-US, PG-US, CHD-US, AVP-US, UL-US, RBGPF-US, KCRPY-US, CAW-US, KMB-US and BDRFY-US).
Colgate-Palmolive Co.’s dividend yield is 2.67 percent and its dividend payout is 56.99 percent. This compares to a peer median dividend yield of 2.36 percent and a payout level of 60.58 percent. This relatively higher dividend yield and lower payout ratio makes the company a good candidate for dividend investors looking seeking good current dividend income within this peer group. In addition, the company’s relatively good dividend quality score of 67 out of a possible score of 100, underscores its attractiveness for dividend investors.
Dividend Quality Overview
- Over the last twelve months (prior to December 31, 2016), CL-US paid a high quality dividend, which represents a yield of 2.11% at the current price.
- Dividends paid during each of the last five years were consistently of high quality.
- The ending cash balance is less than the last full year dividend payment and cannot be relied on to cushion any significant reduction of cash flows in the future.
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Over the last twelve months (prior to December 31, 2016), CL-US paid a high quality dividend.
The source of the company’s cash to support the dividend paid over the last twelve months is operating cash flow (coverage of 2.08x), investing cash flow (coverage of -0.33x), issuance cash flow (coverage of -0.48x) and twelve-month prior cash (coverage of 0.71x), for a total dividend coverage of 1.92x.
CL-US‘s issuance cash flow includes outflows from net share buybacks (coverage of -0.59x). Thus, the total coverage including share buybacks is 2.51x, which reflects our assumption that the cash paid for share buybacks is discretionary and could instead be used to pay dividends.
These coverage ratio factors imply that the firm’s dividends are wholly paid from operating and investing cash flows net of any debt repayments, which suggests a high dividend quality.
|Dividend Yield (%)||2.61||2.3||2.07||2.28||2.61||2.67|
|Dividend Payout (%)||47.38||55.88||60.17||98.68||56.99||56.99|
A complete list of metrics and analysis is available on the company page.
Colgate-Palmolive Co. engages in the manufacturing and distribution of consumer products. It operates through two segments: Oral, Personal and Home Care; and Pet Nutrition. The Oral, Personal and Home Care segment provides oral products such as toothpaste and toothbrush, mouthwashes, as well as dental floss and pharmaceutical products for dentists and other oral health professionals; personal care such as liquid hand soap, shower gels, bar soaps, deodorants and antiperspirants, shampoos, and conditioners; and home care solutions that include household cleaners, dishwashing liquids, fabric softeners and other related products. The Pet Nutrition segment is specialized in pet nutrition products for dogs, and cats sold among pet supply retailers, and veterinarians. The company was founded by William Colgate in 1806 and is headquartered in New York, NY.
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