Updated on March 1st, 2025 by Felix Martinez
Over time, the Dividend Aristocrats have proven to be among the best-performing dividend growth stocks in the entire market. Broadly speaking, the Dividend Aristocrats have leadership positions in their respective industries, with durable competitive advantages that allow them to generate long-term growth.
The Dividend Aristocrats are a group of 69 companies in the S&P 500 Index that have increased their dividends for 25+ consecutive years.
You can download the full spreadsheet of all 69 Dividend Aristocrats, along with several important financial metrics such as price-to-earnings ratios and dividend yields, by clicking on the link below:
Disclaimer: Sure Dividend is not affiliated with S&P Global in any way. S&P Global owns and maintains The Dividend Aristocrats Index. The information in this article and downloadable spreadsheet is based on Sure Dividend’s own review, summary, and analysis of the S&P 500 Dividend Aristocrats ETF (NOBL) and other sources, and is meant to help individual investors better understand this ETF and the index upon which it is based. None of the information in this article or spreadsheet is official data from S&P Global. Consult S&P Global for official information.
A select number of Dividend Aristocrats also qualify as Dividend Kings, an even more exclusive group of 50 stocks that have raised their dividends for 50+ consecutive years.
Colgate-Palmolive (CL) is a Dividend Aristocrat and King. Its long history of dividend increases is due to its strong brands and dominant position across multiple product categories.
Colgate-Palmolive has paid uninterrupted dividends since 1895 and has increased its dividend payments for the past 63 consecutive years.
Colgate-Palmolive stock may be trading at a premium today, but it still remains a strong holding for reliable and steady dividend growth.
Business Overview
Colgate-Palmolive’s roots date back to 1806, making it one of the oldest companies in the US stock market. It was founded by William Colgate, who started a starch, soap, and candle business in New York City.
Today, the company manufactures oral care products like toothpaste, personal care products such as soap, home cleaning products, and pet food.
Major brands include Colgate, Palmolive, Hill’s Science Diet, and many more. The core segment is Oral Care, which constitutes nearly half of the company’s revenues. Colgate-Palmolive is a global giant. The company sells its products in over 200 countries and territories around the world and generates over $20 billion in annual sales.
Colgate-Palmolive has a highly diversified business model in terms of products and geographic markets. Approximately half of the company’s revenue comes from emerging markets, although its reliance upon these markets for growth has waned recently.
This is due to the success of the company’s pet nutrition business, as it continues to take a revenue share from other segments. Emerging markets will be a critical growth catalyst for the company moving forward. Colgate-Palmolive has the #1 position in China, with a market share above 30%.
However, the company also faces several challenges, including global supply chain issues and pronounced inflation that’s increasing costs across the board, including in raw materials and labor. These factors could keep a lid on growth going forward.
Growth Prospects
Colgate-Palmolive generally enjoys a world-class brand portfolio and high profit margins. The company’s pet food products, in particular, are a compelling growth catalyst in the U.S. pet food is a growth industry.
Colgate posted fourth quarter earnings on January 31st, 2025. The company reported strong 2024 results, surpassing $20 billion in net sales for the first time. Net sales grew 3.3%, with organic sales up 7.4%. GAAP EPS rose 27% to $3.51, and Base Business EPS increased 11% to $3.60. Operating cash flow grew 10% to $4.1 billion, allowing $3.4 billion in returns to shareholders. Despite a slight 0.1% drop in Q4 net sales, organic sales rose 4.3%, and EPS saw modest gains.
The company maintained its global leadership in oral care, with a 41.4% market share in toothpaste and 32.2% in manual toothbrushes. Gross profit margins improved, supported by pricing strategies and cost efficiencies. Advertising investment increased to drive brand strength and innovation. Colgate remains confident in its ability to sustain 3%- 5% organic sales growth in 2025, despite currency headwinds.
For 2025, Colgate expects flat net sales due to foreign exchange impacts but continued gross profit margin expansion. It plans to exit private-label pet nutrition while maintaining strong investment in marketing and digital initiatives. Management remains optimistic about delivering consistent EPS growth and long-term success.
Source: Investor Presentation
We see Colgate-Palmolive producing an average of 8% annual earnings-per-share growth in the next five years.
Competitive Advantages & Recession Performance
Colgate-Palmolive has many competitive advantages which have fueled its growth over the past 200+ years.
First, it has built a dominant position in its core product categories, most notably in toothpaste, where Colgate-Palmolive’s market share has risen steadily for many years. Today, it commands a higher market share than the next three biggest competitors combined.
Such a high market share allows Colgate-Palmolive to charge higher prices for its premium products and raise prices over time. Pricing power is a critical competitive advantage for consumer goods stocks.
Another major advantage for Colgate-Palmolive is that the products it sells are necessities of modern life. Consumers need oral, personal, and pet care products regardless of economic conditions. Colgate-Palmolive enjoys steady demand, which gives the company consistent profitability, even during recessions.
Colgate-Palmolive’s earnings-per-share through the Great Recession are shown below:
- 2007 earnings-per-share of $1.69
- 2008 earnings-per-share of $1.83 (8.3% increase)
- 2009 earnings-per-share of $2.19 (20% increase)
- 2010 earnings-per-share of $2.16 (1.4% decline)
Colgate-Palmolive generated positive earnings growth in 2008 and 2009, during the worst years of the recession. Earnings dipped slightly in 2010 but resumed growing in 2011 and thereafter.
The company’s strong performance from 2007-2010 is a credit to its strong business model and powerful brands. These same qualities helped Colgate-Palmolive remain highly profitable and raise its dividend in 2020, even with the impact of the global coronavirus pandemic.
Colgate-Palmolive’s dividend is also very safe. The company’s projected dividend payout ratio is 54% for fiscal 2025, which suggests that the dividend is well-covered.
Valuation & Expected Returns
With expectations of about $3.70 in earnings-per-share for 2025, Colgate-Palmolive stock has a price-to-earnings ratio of 24.6.
Our fair value estimate for CL stock is a P/E multiple of 24. Therefore, the stock appears to be slightly overvalued. A declining P/E multiple could reduce annual returns by -1.0% per year over the next five years.
In addition, CL shares have a current dividend yield of 2.2%.
Assuming the stock maintains a fairly stable valuation ahead, along with our projected earnings growth and estimated adjusted earnings-per-share for 2025, we forecast Colgate Palmolive can produce annualized total returns of approximately 9.2% through 2030.
As a result, we have assigned a hold rating to the company’s shares.
Final Thoughts
Colgate-Palmolive is a high-quality business with several category-leading brands. The company has growth potential through product innovation, its Hill’s pet food brand, and growth in emerging markets.
Colgate’s dividend should remain well-covered, and so further dividend hikes in the coming years should be relatively easy.
With annual returns just above 9%, we currently rate CL stock a hold.
Looking for more dependable dividend growth stocks? The following Sure Dividend databases contain the most trustworthy dividend growers in our investment universe:
- The Dividend Contenders List: 10-24 consecutive years of dividend increases.
- The Dividend Challengers List: 5-9 consecutive years of dividend increases.
- The Dividend Champions: Dividend stocks with 25+ years of dividend increases, including those that may not qualify as Dividend Aristocrats.
- The Dividend Achievers: dividend stocks with 10+ years of consecutive dividend increases.
- The Dividend Kings: considered to be the ultimate dividend growth stocks, the Dividend Kings list is comprised of stocks with 50+ years of consecutive dividend increases
If you’re looking for stocks with unique dividend characteristics, consider the following Sure Dividend databases:
- The Complete List of Monthly Dividend Stocks: stocks that pay dividends each month, for 12 payments over the year.
- The Blue Chip Stocks List: this database contains stocks that qualify as either Dividend Achievers, Dividend Aristocrats, or Dividend Kings.
The major domestic stock market indices are another solid resource for finding investment ideas. Sure Dividend compiles the following stock market databases and updates them monthly: