Driven by its strong positive outlook, the global consumer
) has raised its quarterly cash dividend, effective from the
second quarter of fiscal 2014.
The company has hiked its quarterly dividend by approximately
6% to 36 cents per share from the prior payout of 34 cents. This
comes to a yearly dividend of $1.44 per share, reflecting a
dividend yield of nearly 2.3% based on Thursday's closing price
of $63.23. The new dividend will be paid on May 15 to
shareholders of record on Apr 22.
Colgate-Palmolive has a history of paying regular quarterly
dividends since 1895, which clearly reflects its strong
fundamentals. Since then, the company has paid dividends every
quarter, even amid economic crises like the Great Depression of
the 1930s, stagflation in the 1970s and the recession of 2008.
Apart from paying regular dividends, the company has been focused
on increasing its dividend rate every year for about 50 years
The strength of Colgate-Palmolive's business model is
reflected in its strong cash generation capabilities and
commitment to return value to shareholders. The company's strong
balance sheet and cash flows provide it financial flexibility to
make shareholder-friendly moves, R&D investments and expand
During 2013, Colgate-Palmolive shelled out $1,382 million on
cash dividends and $1,521 million toward share repurchases. Cash
and cash equivalents stood at $962 million at the end of the
fiscal while cash from operational activities was $3,204 million.
We remain encouraged by the company's strong cash position and
its ability to service long-term debts.
Other companies that recently increased quarterly dividend
Family Dollar Stores Inc.
). These two companies raised their dividends by 6.1% to 43.25
cents and 19.2% to 31 cents, respectively.
McGraw Hill Financial, Inc.
) also recently hiked its payout by 7.1% to 30 cents.
We believe that dividend hikes not only enhance shareholders'
return but raise the market value of the stock as well. Through
these dividend rises, companies persuade investors to either buy
or hold the scrip instead of selling it. Looking ahead,
Colgate-Palmolive remains confident of its growth potential,
suggesting that further enhancement of shareholders' value
through dividend payouts and share buybacks could take place.
Currently, Colgate-Palmolive has a Zacks Rank #3 (Hold).
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