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business newsSilver Lining: Colgate Promises Advanced Whitening, Higher Stock Prices
Prospects, dividend pay-offs look promising.
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At least that’s what I have to gather based on Colgate Palmolive’s (CL) fourth-quarter numbers.
The New York-based company put up $1 a share excluding items, which was a healthy $0.02 due north of what the Street had been expecting. Its sales line came in at about $3.66 billion, which was just shy of the $3.7 billion estimate that I’m seeing. But it was a good number, given the currency headwinds it was up against.
Its prospects going forward sound like they could be pretty bright and shiny too. Ian Cook, the chief executive officer, offered up the following in the release:
“Overall, despite the global economic slowdown, we are comfortable with external profit expectations for the first quarter and full year 2009.”
In the release, it didn’t get down and dirty with specific numbers. However for the first quarter, the estimate I’m seeing is $0.97, and I’m seeing $4.23 a share for the full year.
What about the stock?
I think it heads higher from here. My reasoning is simple:
Although people looking to save may try to stretch their dollar more by shopping at deep discounters and/or buying generic brands, I think the want for its wares will be strong, both here and abroad. Think for a second about your everyday routine and ask yourself how long can you go without deodorant, toothpaste, soap, detergent, or pet food. (Note to self: Feed dog.)
But hey, even if I’m wrong and Americans decide to go au naturale, the good news is that the company's oral, personal, and home-care sales in North America amount to just 19.4% of total sales. Hopefully that’ll mitigate some risk.
Finally, let’s not forget the dividend. Although dividends are never guaranteed, Colgate does have a nice history of paying them. The yield is north of 2% - not a reason in and of itself for me to get in the stock but nice, nonetheless.
Have a great day - and don’t forget to brush your teeth.
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