Colgate-Palmolive CompanyCL looks good backed by its robust brand strength, capital allocation strategy as well as innovation and in-store implementation initiatives. In addition, better pricing, emerging market growth and execution of its cost-saving programs hold promise of healthy margins.
Shares of this Zacks Rank #2 (Buy) company returned 11.9% in the past three months, outperforming the Zacks categorized Consumer Staples sector that gained 7.6%. Also, the stock boasts a Growth Score of "B" and a long-term earnings growth rate of 9.3%, highlighting its growth potential. Moreover, the company's share price is hovering close to its 52-week high of $75.38.
Colgate enjoys a market-leading position in the oral care and personal care product categories. We believe its continued focus on product innovations, globally recognized brands and broad international presence in both developed and emerging markets facilitate the company to take advantage of growth opportunities, thereby enhancing profitability.
In addition, innovation and in-store implementation have been the guiding principles for Colgate's growth strategy over the years, enabling it to capture market share across all regions and categories. Moreover, management expects to further gain market share in 2017 via a series of innovative product launches lined up for the year.
Evidently, Colgate is progressing well with its savings programs, as both, its Global Growth and Efficiency Program or 2012 Restructuring Program and Funding the Growth undertakings are delivering impressive results. In fact, these programs are expected to contribute significantly toward the improvement of gross and operating margins over the long term. Alongside, the company also maintains a disciplined capital allocation strategy that focuses on making investments to develop business, while using the excess cash to enhance shareholder returns.
Going forward, Colgate expects solid organic sales growth in 2017, backed by new products, appealing marketing and advertising programs. In addition, estimates have moved north over the last seven days. The Zacks Consensus Estimate has increased by a penny for both the first quarter and 2017 to 66 cents and $2.92, respectively. Also, the currently pegged estimates for the first quarter and 2017 represent a year-over-year growth of 4.8% and 3.9%, respectively.
However, Colgate has been bearing the brunt of currency headwinds for a while now, which seem to weigh upon its top line. Further, management expects a challenging backdrop in 2017 owing to uncertain global markets and lingering currency woes that is expected to hurt results, moving ahead.
Other Stocks You May Consider
Unilever, with a long-term earnings growth rate of 9.6% has increased 11.9% in the past one year. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .
Ollie's Bargain Outlet, a Zacks Rank #1 stock, has surged 31.2% in the past one year. Also, it has a long-term earnings growth rate of 17.1%.
Limoneira, which carries a Zacks Rank #2, has jumped 31.5% in the past one year. Also, it has a long-term earnings growth rate of 15%.
Zacks' Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public. Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Click here for Zacks' private trades >>