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Is CL a good stock to buy? We came across a bullish thesis on Colgate-Palmolive Company on Investing Lawyer’s Substack. In this article, we will summarize the bulls’ thesis on CL. Colgate-Palmolive Company's share was trading at $84.17 as of April 27th. CL’s trailing and forward P/E were 32.00 and 21.60 respectively according to Yahoo Finance.
Colgate-Palmolive Company operates across oral care, personal care, and household products, anchored by globally recognized brands such as Colgate toothpaste and Palmolive soap, positioning it as a quintessential defensive consumer staples business with steady, non-discretionary demand. The core investment case rests on the durability of its end markets, as everyday essentials like toothpaste benefit from consistent consumption patterns regardless of broader economic conditions, providing resilience through market cycles.
According to Seeking Alpha data, the company maintains a payout ratio of approximately 55.9%, alongside a 5-year dividend growth rate of 3.32% and an impressive 62-year track record of consecutive dividend increases, underscoring both stability and disciplined capital allocation. Importantly, the relatively moderate payout ratio offers greater flexibility compared to higher-yielding peers, allowing Colgate to sustain dividends while continuing to invest in brand strength, innovation, and global distribution.
This balance supports long-term shareholder returns without overextending cash flows. While the yield itself may not stand out, the reliability of earnings and cash generation reinforces its role as a steady compounder rather than a high-income play. Ultimately, the thesis is less about short-term upside and more about enduring demand fundamentals, as products central to daily hygiene routines exhibit minimal elasticity.
This inherent stickiness creates a dependable revenue base that supports consistent dividends and modest growth, making Colgate-Palmolive an attractive option for investors seeking stability, predictability, and downside resilience in uncertain market environments.
Previously, we covered a bullish thesis on Colgate-Palmolive Company (CL) by Kontra in October 2024, which highlighted its global scale, emerging market growth, and positioning as a quality compounder with strong pricing power and high ROIC. CL’s stock price has depreciated by approximately 16.21% since our coverage. Investing Lawyer shares a similar view but emphasizes on dividend stability and demand resilience.
Colgate-Palmolive Company is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 62 hedge fund portfolios held CL at the end of the fourth quarter which was 56 in the previous quarter. While we acknowledge the risk and potential of CL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CL and that has 10,000% upside potential, check out our report about this cheapest AI stock.