Katy buys CL 63.14: With a return to growth in market share and further penetration into foreign markets Colgate-Palmolive will continue to offer compelling growth and dividend growth prospects for investors.

The dividend is well covered by both earnings and free cash flow; however, the payout ratio based on earnings has been drifting higher earnings growth has been stagnant. Colgate-Palmolive fits square into the consumer staple sector which makes it a great defensive investment and dividend growth candidate. Demand for toothpaste and soap is much less elastic than for the latest electronic gadget or car. Consumer staples tend to not fluctuate as much as the market as a whole because of the nature of their business. For the defensive investor consumer staples are the perfect remedy for volatile markets.


Belinda:
The stock market has been quite volatile over the last month or so for a variety of reasons.

Justa:
In this case the Gordon Growth Model and Graham Number valuations are removed and the new target entry price becomes $51.28. Shares are currently trading for a 20.7% premium to this price.

Audrey:
Colgate-Palmolive has spent a total of $7.037 B on share buybacks since the end of FY 2009. The share count has been reduced by 125.0 M shares over that time.

Jani:
At the end of FY 2009 the diluted weighted shares outstanding were at 1.049 B and by the end of FY 2014 they sat at 924.0 M.

Lajuana:
The following table shows the high and low end of the 5 and 10 year historical averages for dividend yield, P/E ratio, P/S ratio, and EBITDA per share as well as the FY 2015 estimate for each metric with the corresponding price targets.

Rafaela:
I consider anything less than 5 years to be safe and Colgate-Palmolive is well below that mark despite the high total debt levels.

Kellye:
Based on the average net income of the last 3 years, $2.460 B, CL could use its cash stockpile of $1.089 B and repay all of its debt with 2.1 years worth of net income if they desired.

Marilyn:
Colgate-Palmolive's balance sheet has been stretched much further than I prefer.

Fae:
As you'll see in the next section something will have to give because the balance sheet is already stretched.

Elease:
Management has been forced to increase debt levels in order to maintain their robust share buyback program.

Colgate-Palmolive Company (NYSE:CL)
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