Money and Finance
As a dividend growth investor, consumer staples companies are great because people need to brush their teeth, clean their house and wash their body whether the economy is in boom or bust mode. It's the consistency in their operations and steady, although sometimes slow, growth that allows them to continue to grow year in and year out and the reason why you can find several consumer staples companies on the list of dividend champions. Earlier this week I updated my valuation on The Procter & Gamble Company (PG) (Full Analysis Here) but today I wanted to see how Colgate-Palmolive Company (CL) stacks up. Colgate-Palmolive closed trading on Monday, April 28th at $67.86 giving a current yield of 2.12%.
Discounted Earnings:
Analysts followed by Yahoo!Finance expect Colgate-Palmolive Company to grow earnings 8.90% per year over the next five years and I've assumed they can grow at 7.12% (80% of 8.90%) for the next three years and at 3.50% in perpetuity. Running these numbers through a discounted earnings analysis with a 10% discount rate and summing over 30 years yields a fair value price of $62.01. This means the shares are trading at a 9.4% premium to the discounted earnings analysis.
Click here to read the rest of the analysis on Seeking Alpha.
If you'd like to receive posts via email you can do so here or on the Subscribe page at the top of this blog. As an email subscriber you'll be the first to know about ideas that are running around in my head for the blog. Also make sure to follow me on Twitter to get real time updates of purchases and what I'm reading.
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Money and Finance
Colgate-Palmolive Company: High Quality But Should You Buy?
As a dividend growth investor, consumer staples companies are great because people need to brush their teeth, clean their house and wash their body whether the economy is in boom or bust mode. It's the consistency in their operations and steady, although sometimes slow, growth that allows them to continue to grow year in and year out and the reason why you can find several consumer staples companies on the list of dividend champions. Earlier this week I updated my valuation on The Procter & Gamble Company (PG) (Full Analysis Here) but today I wanted to see how Colgate-Palmolive Company (CL) stacks up. Colgate-Palmolive closed trading on Monday, April 28th at $67.86 giving a current yield of 2.12%.
Discounted Earnings:
Analysts followed by Yahoo!Finance expect Colgate-Palmolive Company to grow earnings 8.90% per year over the next five years and I've assumed they can grow at 7.12% (80% of 8.90%) for the next three years and at 3.50% in perpetuity. Running these numbers through a discounted earnings analysis with a 10% discount rate and summing over 30 years yields a fair value price of $62.01. This means the shares are trading at a 9.4% premium to the discounted earnings analysis.
Click here to read the rest of the analysis on Seeking Alpha.
If you'd like to receive posts via email you can do so here or on the Subscribe page at the top of this blog. As an email subscriber you'll be the first to know about ideas that are running around in my head for the blog. Also make sure to follow me on Twitter to get real time updates of purchases and what I'm reading.
- Bemis Company, Inc. Dividend Stock Analysis
As part of building a diversified dividend growth portfolio it's important to own not only a number of companies but also companies that operate in a variety of industries. Previously I've looked at some restaurants, beverages, and consumer staples...
- Can Johnson & Johnson Cure What Ails Your Portfolio?
Johnson & Johnson (JNJ) is well known around the dividend growth investing community with over 50 consecutive years of dividend increases. Chances are there's Johnson & Johnson products in your medicine cabinet right now and if you've...
- Is Cracker Barrel Old Country Store, Inc. Cooking Up Rewards For Investors?
Cracker Barrel Old Country Store Inc. (CBRL) has been a dividend darling the past few years with huge dividend increases and massive share buybacks while the share price was depressed. If you do a lot of travel by car you're most likely familiar with...
- Is Family Dollar Stores, Inc. A Bargain?
I'm always on the lookout for new to me dividend growth companies and recently received a request to do a full analysis on Family Dollar Stores, Inc. (FDO). What was really surprising is that Family Dollar Stores has a 38 year history of increasing...
- How Yummy Is Yum Brands' Valuation?
Last week I updated my valuation of McDonald's Corporation (MCD) and the price appears to offer a decent value. You can read the full analysis here. As more of a growth play I wanted to take a look at its largest competitor YUM! Brands,...