Colgate-Palmolive Company (CL): A Bull Case Theory

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 $83.51 as of August 1^st. CL’s trailing and forward P/E were 23.46 and 22.68, respectively according to Yahoo Finance.

Colgate-Palmolive (CL), a global leader in consumer goods, stands out as a compelling dividend investment due to its exceptional consistency and resilience. The company has increased its dividend for 62 consecutive years, earning its status as a Dividend King. With a current dividend yield of 2.30% and a payout ratio of 59.26%, Colgate demonstrates a disciplined capital allocation strategy that balances shareholder returns with financial stability. Its diversified portfolio, spanning oral care, personal care, and pet nutrition, ensures steady demand regardless of economic conditions, reinforcing the company’s defensive nature.

From a technical perspective, Colgate’s long-term price action remains bullish, supported by a well-established upward trend. The stock has historically bounced off a key monthly trend line five times, suggesting strong support in the $80–$85 range, which could present an attractive entry point for investors. This price behavior, combined with the company’s fundamentals, strengthens the case for sustained growth and stability.

Colgate’s brand strength, global presence, and focus on essential products provide significant pricing power and cash flow visibility, enabling continued dividend growth. The moderate payout ratio leaves room for further increases, underscoring the reliability of future income for long-term investors. In an uncertain macro environment, the predictability of consumer staples like toothpaste adds another layer of security to the investment thesis. With its robust track record, strong market positioning, and potential technical rebound, Colgate-Palmolive offers an appealing blend of income, stability, and upside potential, making it a top pick for dividend-focused portfolios.

Previously, we covered a bullish thesis on Colgate-Palmolive Company (CL) by Kontra in October 2024, which focused on premiumization, emerging market strength, and pricing power. The stock has depreciated about 16.8% since then due to macro pressures, though the thesis holds as CL remains a defensive compounder. Investing Lawyer shares a similar view but emphasizes dividend growth consistency and technical support levels.

Colgate-Palmolive Company is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 65 hedge fund portfolios held CL at the end of the first quarter which was 62 in the previous quarter. While we acknowledge the potential of CL as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.