Company Profile
Company founding history
Colgate-Palmolive (Colgate-Palmolive, ticker: CL) was founded in 1806 by William Colgate.
Most famous product
In 1873, the company introduced the first Colgate toothpaste. In 1898, he developed the world’s best-selling Palmolive soap.
Main products
It produces and operates care and hygiene products, including toothpaste, toothbrushes, soap, shampoo, etc. Among them, Colgate brand oral care series (toothpaste, toothbrush, mouthwash) products are the most famous. Colgate-Palmolive also has the “Hill’s” brand, which sells pet supplies.
Competitors
Household cleaning products
Colgate’s main direct competitor is Pro-Qiao Company (ticker: LLRCF). Pro-Qiao’s product line has a high degree of overlap with Colgate’s product line–that is, soap and detergent.
Clorox (ticker: CLX), a household detergent brand, is another competitor in this field that is larger than Colgate and PQ.
Beauty
In the field of beauty, L’Oréal (ticker: LRLCF) and Unilever (ticker: UL) are long-term leaders in this field, ranking first and second respectively, followed by Colgate, Estee Lauder (ticker: EL), P&L Overseas Chinese are ranked among the last three.
Colgate is mentioned in my book
In Sections 5-6 of my book “The Rules of Super Growth Stocks Investing“, I mentioned the company Colgate (ticker: CL) as an example.
Three major mergers and acquisitions
Filorga
In order to enter the field of personal skin care products with higher profits; in July 2019, Colgate-Palmolive spent 1.495 billion euros to acquire the skin care products business of Laboratoires Filorga Cosmétiques, a French biotechnology cosmeceutical brand.
Hello Products
In 2020, Colgate-Palmolive acquired Hello Products LLC, one of the fastest-growing premium oral care brands in the United States, for an undisclosed amount; entering the oral care field.
Palmolive and Colgate
The two companies, Palmolive and Colgate, began negotiating a merger between the two companies in 1928, and the merger took effect in July 1928. In 1953, the two companies became a joint venture, known as the Colgate-Palmolive Company, completing all mergers; becoming the world’s largest soap company.
Benefits of investing in Colgate
Typical defensive stocks
Colgate is one of the best examples of the best defensive stocks. The so-called defensive stocks refer to stocks that investors are more willing to hold during economic downturns or stock market crashes. Consumer staples stocks, real estate, and utilities are the most typical groups, and Colgate belongs to this category.
Defensive stocks often lag during bullish moves in the broader market, but start to catch up when growth stocks start to slow. For example, this type of stock will perform well during the broader market sell-off in 2022.
Dividend
The company’s cash yield is 1.89%, and Colgate-Palmolive has paid uninterrupted dividends on its common stock since 1895 and has increased dividends paid to common shareholders every year for 60 years.
Can be held almost forever
Except for the S&P 500 Index, for stocks in the world that can be held permanently, the answer can be definitely no. But when it comes to stocks that can be held “almost” permanently, there are only a handful of them. I can say with certainty that they are very rare. And Colgate must be one of them.
Real world
When the stock market performs poorly
I have written “Seasonal factors dominate stock rise and fall” and “Only September had negative returns in past century“. It can be seen that U.S. stocks do have seasonal periods of poor performance.
In August 2024, “Sahm Rule, a 100% accurate recession indicator, was triggered“, and the second-quarter results of most companies were lower than expected (please click on my post of “Why market fall after Q2 2004 earning report?).
What are the stocks belong to this category?
- From 2024 to mid-September, Coca-Cola (ticker: KO) stock price has risen by about 20% this year, Costco has risen by about 40.78%, and Colgate has risen by about 30%.
- In the past month, the stock prices of retailers Walmart (ticker: WMT), Costco (ticker: COST), Target Department Store (ticker: TGT), and household detergent brand Clorox (ticker: CLX) have respectively The gains were 14.8%, 5.22%, 9.1% and 15.6%, far exceeding the 4.5% increase of the S&P 500 Index during the same period.
Related articles
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- “Stocks Better than the S&P 500, Procter & Gamble (P&G) “
- “Seasonal factors dominate stock rise and fall“
- “Only September had negative returns in past century“
- “Why market fall after Q2 2004 earning report?
- “Sahm Rule, a 100% accurate recession indicator, was triggered“
- “Coca-Cola has been inferior to Pepsi in and even return rate is negative in past 10 years!“
- “Pros and cons of investing in Coca-Cola“
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