This Once-Sleepy Consumer Staples Stock Is Beating the S&P 500 by 8-to-1 in 2026: Should You Buy?

Core Insights - Colgate-Palmolive has shown a total return of 379% over the past 25 years, with a 533% increase in dividends during the same period, but has underperformed the S&P 500's 539% return [1][2] - In 2026, the stock has risen 16.8%, significantly outperforming the S&P 500's 2.1% increase, leading to speculation about continued momentum [2] Financial Performance - The company's fourth-quarter earnings report revealed a 5.8% year-over-year increase in sales, totaling $5.23 billion, primarily driven by price increases rather than volume growth [3] - Organic sales grew by 2.2%, indicating some growth from existing operations [3] - Despite a reported net loss of $5 million due to a $794 million impairment charge in the skin-health segment, adjusted earnings would have been $0.95 per share, surpassing analyst expectations of $0.91 [4] Market Outlook - Management provided a sales growth outlook of 2% to 6% for the upcoming year, slightly above the 3% expected by analysts [5] - Analysts have consistently underestimated Colgate-Palmolive's sales in the past four quarters, suggesting potential for future surprises [6] Valuation Concerns - The stock's recent price surge has resulted in a price-to-earnings ratio exceeding 34, compared to the S&P 500 average of 29.5, raising concerns about valuation [8] - Earnings growth from January 2022 to January 2025 was only 12.3%, translating to an annualized growth rate of just over 4%, which may not justify the current valuation [8]