May 23, 2024
Top 10 Stock Colgate-Palmolive Hold Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Colgate-Palmolive – Top 10 Stock in Dividend Champions United States
Colgate-Palmolive is listed as a top 10 stock on May 23, 2024 in the market index Dividends USA because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. The company is growing above average and professional investor sentiment is positive. Both are encouraging signals for a stock purchase decision, albeit at an above-average share price. Based on the Obermatt 360° View of 35 (35% performer), Obermatt assesses an overall hold recommendation for Colgate-Palmolive on May 23, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Household Products |
| Index | Dividends USA, Employee Focus US, Diversity USA, Water Tech, S&P US Consumer, S&P 500 |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Colgate-Palmolive Hold
| 360 METRICS | May 23, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 21 |
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| GROWTH | ||||||||
| GROWTH | 63 |
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| SAFETY | ||||||||
| SAFETY | 9 |
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| SENTIMENT | ||||||||
| SENTIMENT | 100 |
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| 360° VIEW | ||||||||
| 360° VIEW | 35 |
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ANALYSIS: With an Obermatt 360° View of 35 (better than 35% compared with alternatives), overall professional sentiment and financial characteristics for the stock Colgate-Palmolive are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Colgate-Palmolive. The consolidated Growth Rank has a good rank of 63, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. This means that growth is higher than for 63% of competitors in the same industry. The consolidated Sentiment Rank also has a good rank of 100, which means that professional investors are more optimistic about the stock than for 100% of alternative investment opportunities. But the consolidated Value Rank has a less desirable rank of 21, which means that the share price of Colgate-Palmolive is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 79% of alternative stocks in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 9, which means that the company has a financing structure that is riskier than those of 91% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a consolidated 360° View of 35, Colgate-Palmolive is worse than 65% of all alternative stock investment opportunities based on the Obermatt Method. Only half of the consolidated Obermatt Ranks exhibit excellent performance, so one needs to take a close look. Growth is above-average (Growth Rank of 63), and professional market sentiment is positive (Sentiment Rank of 100), but value and safety are below average. The Safety Rank is the least significant of the four consolidated ranks, because it only reflects financing practices. In the case of high growth, aggressive financing is a good thing. So the question is: How to assess below-average value against above-average growth and sentiment? Growth may be the strongest driver of the investment rationale in this case, which is reflected in institutional investors' opinions. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the question is, how much do you sacrifice value for growth? You can use the following rule of thumb: If you take 100 minus the growth rank, you arrive at a possibly minimum level for the value rank. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value if the growth rank is above 60. Sometimes market sentiment just extrapolates the past, but sometimes it reflects reality. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for Colgate-Palmolive very positive
ANALYSIS: With an Obermatt Sentiment Rank of 100 (better than 100% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock Colgate-Palmolive is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Colgate-Palmolive. Analyst Opinions are at a rank of 55 (better than 55% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive with a rank of 97, which means that stock research experts are changing their opinions for the better and recommending investing in the company. They are getting more optimistic about stock investments in Colgate-Palmolive. The Professional Investors rank is 83, which means that currently, professional investors hold more stock in this company than in 83% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 100 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 100% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 100 (more positive than 100% compared with investment alternatives), Colgate-Palmolive has a reputation among professional investors that is significantly higher than that of its competitors. Since all market sentiment indicators are positive, the professional community highly recommends investment in the company. Does this mean Colgate-Palmolive stocks are a safe investment? Far from it. Even professionals make mistakes. Especially in stock investing, there is a tendency to follow the leaders. Since trees don't grow to the heavens, such positive sentiment may also be interpreted as a danger sign. A lot of optimism can often be a sign of troubles to come, albeit unforeseen by most. ...read more
Value Strategy: Colgate-Palmolive Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 21 (worse than 79% compared with alternatives), Colgate-Palmolive shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Colgate-Palmolive. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 76% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 32 which means that the stock price compared with what market professionals expect for future profits is higher than 68% of comparable companies, indicating a low value concerning Colgate-Palmolive's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 25 which means that the stock price compared with what market professionals expect for future profit levels is higher than 75% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 1 is also low. Compared with invested capital, the stock price is higher than for 99% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 21, is a sell recommendation based on Colgate-Palmolive's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Colgate-Palmolive? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Colgate-Palmolive only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: Colgate-Palmolive Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 63 (better than 63% compared with alternatives), Colgate-Palmolive shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Colgate-Palmolive. Capital Growth has a rank of 70, which means that currently professionals expect the company to grow its invested capital more than 46% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 62 (above 62% of alternative investments). But Sales Growth has only a rank of 43, which means that, currently, professionals expect the company to grow less than 57% of its competitors, and Profit Growth is also low at a rank of 46. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 63, is a buy recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for Colgate-Palmolive, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. ...read more
Safety Strategy: Colgate-Palmolive Debt Financing Safety risky
| SAFETY METRICS | May 23, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 5 |
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| REFINANCING | ||||||||
| REFINANCING | 11 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 84 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 9 |
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ANALYSIS: With an Obermatt Safety Rank of 9 (better than 9% compared with alternatives), the company Colgate-Palmolive has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Colgate-Palmolive is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Colgate-Palmolive. Liquidity is at 84, meaning the company generates more profit to service its debt than 84% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 11, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 89% of its competitors. Leverage is also high at a rank of 5, which means that the company has an above-average debt-to-equity ratio. It has more debt than 95% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 9 (worse than 91% compared with alternatives), Colgate-Palmolive has a financing structure that is significantly riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. ...read more
Combined financial peformance: Colgate-Palmolive Lowest Financial Performance
| COMBINED PERFORMANCE | May 23, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 21 |
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| GROWTH | ||||||||
| GROWTH | 63 |
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| SAFETY | ||||||||
| SAFETY | 84 |
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| COMBINED | ||||||||
| COMBINED | 12 |
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ANALYSIS: With an Obermatt Combined Rank of 12 (worse than 88% compared with investment alternatives), Colgate-Palmolive (Household Products, USA) shares have lower financial characteristics compared with similar stocks. Shares of Colgate-Palmolive are low in value (priced high) with a consolidated Value Rank of 21 (worse than 79% of alternatives), and are riskily financed (Safety Rank of 9, which means above-average debt burdens) but show above-average growth (Growth Rank of 63). ...read more
RECOMMENDATION: A Combined Rank of 12, is a sell recommendation based on Colgate-Palmolive's financial characteristics. As the company Colgate-Palmolive shows low value with an Obermatt Value Rank of 21 (79% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 63% of comparable companies (Obermatt Growth Rank is 63). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 9 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Colgate-Palmolive, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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