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]

Core Viewpoint - Colgate-Palmolive has been a reliable stock over the past 25 years, with significant dividend growth, but it has underperformed compared to the S&P 500 in terms of share price appreciation [2][3][4]. Group 1: Dividend Performance - The company has increased its dividend by 558% since 2000, with a current annual dividend of $1,230 for a $10,000 investment [2]. - Colgate-Palmolive is part of the "Dividend Kings," having raised its dividend for 62 consecutive years, a feat achieved by only 55 out of approximately 54,000 publicly traded companies [6]. - However, the dividend increases have not kept pace with inflation, with an 18% increase over the last five years compared to a 25% inflation rate [7]. Group 2: Stock Performance - Despite a 352% increase in stock price since 2000, Colgate-Palmolive has lagged behind the S&P 500, which has risen by 385% in the same period [3][8]. - The stock has declined by 15% year-to-date, contrasting with a bull market environment [5]. - Over the last five years, shares have fallen by 7%, while the S&P 500 has returned 94% [9]. Group 3: Market Challenges - A significant challenge for Colgate-Palmolive is the strength of the U.S. dollar, as only 19% of its revenue is generated domestically. The remaining 81% from foreign markets is adversely affected by currency conversion, impacting earnings per share [9].