The shares of
) reached a new 52-week high of $112.04 on Wednesday, Feb 19,
gaining momentum from the company's consistent performance as
well as an encouraging outlook. This Zacks Rank #3 (Hold) global
consumer products company eventually closed at $111.91 yesterday,
recording a healthy return of 19.9% over the past year. Average
volume of shares traded over the last 3 months stands at
Drivers that Triggered Momentum
An impressive record of either meeting or beating the
quarterly earnings expectations, a positive fiscal 2013 outlook
and a decent dividend yield are the factors that enabled the
shares of Colgate to reach a new high.
With respect to earnings surprises, Colgate has either met or
surpassed the Zacks Consensus Estimate for the last several
quarters, most recently topping it by 0.71% in the fourth quarter
of fiscal 2012.
On Jan 31, Colgate posted impressive quarterly results with
strong earnings and sales comparisons for the fourth quarter of
fiscal 2012. The company posted adjusted earnings of $1.41 per
share that came a penny ahead of the Zacks Consensus Estimate and
jumped 8.5% year over year.
Global sales of $4,286 million inched up nearly 2.7% from the
prior-year quarter's level of $4,172 million, primarily
benefiting from a 2.5% upside in pricing and 1.5% increase in
global unit volumes (excluding divested businesses), partially
offset by a negative impact of 1.5% from foreign exchange.
The company's adjusted gross profit margin expanded 90 basis
points (bps) to 58.6%, driven by increased prices as well as cost
savings from the company's funding-the-growth initiatives.
Looking ahead, Colgate-Palmolive anticipates that growth
momentum will continue in fiscal 2013 with gross margin expansion
and double-digit growth in earnings per share. However, lingering
macroeconomic concerns in Venezuela will remain a drag on its
financials in the coming quarters.
Colgate is also known for its shareholder friendly moves. The
company has been regularly increasing its dividend every year
since 2001, currently paying out annual cash dividend of $2.48.
This currently yields a solid 2.2%, while the company has a
payout ratio of 47%.
Besides Colgate, other consumer products companies like
The Clorox Company
Procter & Gamble Company
) focus on improving shareholder value by paying regular
Stock's Key Indicators
Colgate currently trades at a forward P/E of 19.2x, at par
with the peer group average. Its price-to-sales ratio of 3.1 is
significantly above the peer group average of 1.9. Moreover, the
company's return-on-equity (ROE) and return-on-investment (ROI)
are 101.9% and 41.6%, respectively, which are notably higher than
the peer group average. The company's strong fundamentals are
well supported by its long-term estimated EPS growth rate of
COLGATE PALMOLI (CL): Free Stock Analysis
CLOROX CO (CLX): Free Stock Analysis Report
ECOLAB INC (ECL): Free Stock Analysis Report
PROCTER & GAMBL (PG): Free Stock Analysis
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