June 01, 2025 a 02:46 am
CL: Dividend Analysis - Colgate-Palmolive Company
Colgate-Palmolive exhibits a robust dividend profile with a significant history of uninterrupted dividend payments for 53 years. The company's commitment to returning value to shareholders is evident through its stable dividend performance and growth over the years. Despite a relatively moderate current yield, its consistent dividend history and stable payout ratios make it an attractive option for income-focused investors.
📊 Overview
Colgate-Palmolive operates within the Consumer Goods sector, renowned for its steady revenue streams and resilience during economic downturns. The company's dividend yield is currently at 2.12%, coupled with a dividend per share of 2.19 USD. Notably, the company has an impressive dividend history spanning 53 years with no recent cuts or suspensions, underscoring its reliability.
| Sector | Dividend Yield (%) | Current Dividend per Share (USD) | Dividend History (Years) | Last Cut or Suspension |
|---|---|---|---|---|
| Consumer Goods | 2.12 | 2.19 | 53 | None |
🗣️ Dividend History
The consistency of Colgate-Palmolive's dividend payments is a testament to its sustainable business model and financial health. Regular dividend payouts enhance shareholder trust and provide a reliable income stream. This stability is further reflected in the company's ability to withstand economic fluctuations and continue its dividend policy without interruptions.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 1.02 |
| 2024 | 1.98 |
| 2023 | 1.91 |
| 2022 | 1.86 |
| 2021 | 1.79 |
📈 Dividend Growth
Understanding dividend growth is crucial for projecting future income potential and gauging a company's long-term profitability. Colgate-Palmolive has displayed a moderate but steady dividend growth of 3.42% over the last three years and 2.98% over five years, indicating a strong commitment to incremental payout increases.
| Time | Growth (%) |
|---|---|
| 3 years | 3.42 |
| 5 years | 2.98 |
The average dividend growth is 2.98% over 5 years. This shows moderate but steady dividend growth.
⚠️ Payout Ratio
Payout ratios provide insight into the sustainability of a company's dividend payments. Colgate-Palmolive maintains an EPS-based payout ratio of 61.75% and a free cash flow-based payout ratio of 51.14%, suggesting sufficient coverage from earnings and cash flow to support ongoing dividends.
| Key figure ratio | |
|---|---|
| EPS-based | 61.75 % |
| Free cash flow-based | 51.14 % |
With an EPS payout ratio of 61.75%, Colgate-Palmolive efficiently balances earnings distribution with growth, supported further by its FCF-based ratio of 51.14%, indicating robust cash flow management.
✅ Cashflow & Capital Efficiency
Evaluating cash flow yields and capital efficiency ratios is essential in understanding a company's financial health and operational efficiency. Colgate-Palmolive demonstrates a free cash flow yield of 4.60% and an earnings yield of 3.81%, reflecting efficient revenue generation and resource management.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 4.77% | 4.61% | 2.82% |
| Earnings Yield | 3.89% | 3.49% | 2.71% |
| CAPEX to Operating Cash Flow | 13.86% | 18.83% | 27.23% |
| Stock-based Compensation to Revenue | 0.67% | 0.63% | 0.70% |
| Free Cash Flow / Operating Cash Flow Ratio | 86.34% | 81.17% | 72.77% |
The ratios highlight the company's strong cash flow generation and cautious capital expenditure approach, ensuring sustained operational efficiency and value creation.
📉 Balance Sheet & Leverage Analysis
An analysis of leverage ratios reveals Colgate-Palmolive's capacity to manage its debt effectively. The company's prudent balance sheet management is emphasized by its debt-to-equity ratio of 40.15% and a debt-to-assets ratio of 53.05% in 2024, reflecting a well-balanced debt structure.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 40.15% | 14.88% | 22.19% |
| Debt-to-Assets | 53.05% | 55.29% | 56.57% |
| Debt-to-Capital | 97.57% | 93.70% | 95.69% |
| Net Debt to EBITDA | 1.74 | 1.91 | 1.97 |
| Current Ratio | 0.85 | 1.11 | 1.28 |
| Quick Ratio | 0.58 | 0.71 | 0.76 |
| Financial Leverage | 75.69 | 26.92 | 39.23 |
These figures underscore the firm's financial stability and ability to meet short-term obligations and borrowings efficiently.
🔍 Fundamental Strength & Profitability
Profitability metrics such as Return on Equity (ROE) and Margins highlight the firm's operational effectiveness. Colgate-Palmolive's ROE stands at 10.23%, an indicator of efficacious use of equity to generate profits.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 13.63% | 3.78% | 4.45% |
| Return on Assets | 18.00% | 14.03% | 11.35% |
| Net Margin | 14.37% | 11.82% | 9.93% |
| EBIT Margin | 21.13% | 18.91% | 19.94% |
| EBITDA Margin | 21.23% | 21.82% | 22.97% |
| Gross Margin | 60.50% | 58.21% | 57.04% |
| Research & Development to Revenue | 0.00% | 1.76% | 1.78% |
The robust margins indicate Colgate-Palmolive’s efficiency in maintaining competitive profitability and margins in a volatile market.
📈 Price Development
📊 Dividend Scoring System
| Criteria | Score (1-5) | Score Bar |
|---|---|---|
| Dividend yield | 3 | |
| Dividend Stability | 5 | |
| Dividend growth | 3 | |
| Payout ratio | 4 | |
| Financial stability | 4 | |
| Dividend continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 4 |
Total Score: 32/40
⭐ Rating
Colgate-Palmolive Company offers a compelling dividend profile with consistent growth and robust financials. Its stable payout history and efficient capital management further reinforce its reputation as a reliable income-generating stock. With a competitive dividend yield and continuity, it is recommended for income-focused investors looking for a dependable addition to their portfolio.