Shares of global dealer in consumer goods
, Colgate-Palmolive Co.
) hit a 52-week high of $69.89 yesterday, before closing at $69.65
and amassing a year-to-date return of 9.5%.
Shares have been gaining momentum, driven by the company's solid
fundamentals, as evident from Colgate-Palmolive's market-leading
position in oral care and personal care product categories.
We believe that the company's continued focus on product
innovation, along with globally recognized brands and presence in
both developed and emerging economies facilitate the exploitation
of growth opportunities and consequently boost its
This is also evident from Colgate-Palmolive's first-quarter 2014
results, wherein adjusted earnings per share came in at 68 cents,
up 3% year over year and in line with the Zacks Consensus Estimate.
Shares have risen 5.4% since the earnings release.
Additionally, Colgate-Palmolive has always followed a
disciplined capital allocation strategy that focuses on making
investments to develop business while using the excess cash to
enhance shareholder returns through dividend payouts and share
In the first quarter, the company generated $820 million of cash
from operations, paid a total dividend of $316 million and bought
back shares worth $453 million. Colgate-Palmolive has been
regularly increasing its dividend every year since 2001 and
presently pays an annual cash dividend of $1.44.
The company's strong cash generation ability has also enabled it
to reduce long-term debts. These factors reflect the company's
sound financial status and instill confidence among investors about
Moreover, the long term EPS growth rate of this company - which
The Procter & Gamble Co.
) - is in line with the peer group average of 8.9%. Also, the last
traded price is 0.7% below the Zacks Consensus average analyst
price target of $70.17, leaving further room for an upside.
However, as lingering macroeconomic headwinds in Venezuela and
Argentina remain a matter of concern, the company currently carries
a Zacks Rank #4 (Sell).
Apart from Colgate-Palmolive,
Time Warner Inc.
The Walt Disney Company
) also hit 52-week highs of $73.07 and $87.29, respectively on Jul
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