The Colgate Palmolive Company (CL) announced Thursday that its Board of Directors have declared a quarterly cash dividend of $0.44 per common share. The Company has paid uninterrupted dividends on its common stock since the year 1895. Shares of Colgate hit a 52-week high of $79.93 before closing the trading day at $78.71.
Colgate's current dividend yield now stands at 2.2 percent.
The dividend will be payable on payable on November 13, 2009, to shareholders of record on October 26, 2009.. The ex-dividend date is October 22, 2009.
Since the beginning of 2009, Colgate shares have gained about 15 percent and have slightly outperformed the 14 percent gain in the S&P 500 index.
In late July, the consumer staples company reported record earnings for the second quarter of $561.6 million and $1.07 per diluted share.
Colgate has a competitive advantage because of superior branding. Additionally, the company's return on capital has consistently been way above its capital costs. Roughly three-quarters of company sales are outside the United States. The company has strong prospects for increasing sales in fast-growing emerging markets like Latin America and China.
Colgate is valued at a premium to its peers. The current-year P/E ratio is 20.1, just under its five-year average P/E ratio of 22.8. The company pays a relatively low, but extremely solid dividend with a very low payout ratio.
Shares appear to be fairly valued absent stronger confirmation of a robust global economic recovery. If emerging market economies grow faster, the company should enjoy significant capital appreciation. Colgate can provide a stable long-term investment in the consumer-staples sector.
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