Tag Archives: Colgate Palmolive

Business, Finance, Occupation & Industry

Johnson & Johnson Earnings Could Send the Dow Higher Still

Leave a comment

By Dan Caplinger, The Motley Fool

Filed under:

Earnings season has begun, and next Tuesday Johnson & Johnson will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they’ll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you’ll be less likely to make an uninformed, knee-jerk decision.

Johnson & Johnson is a behemoth in the health care space, with a business that includes not only its well-known consumer health and personal-care products, but also a thriving pharmaceutical business and an extensive line of medical devices. The breadth of its offerings has given it a place among the Dow Jones Industrials . However, with so much going on at J&J, can the company hold itself together and take advantage of new growth opportunities? Let’s take an early look at what’s been happening with Johnson & Johnson over the past quarter and what we’re likely to see in its quarterly report.

Stats on Johnson & Johnson

Analyst EPS Estimate

$1.40

Change From Year-Ago EPS

2.2%

Revenue Estimate

$17.46 billion

Change From Year-Ago Revenue

8.2%

Earnings Beats in Past 4 Quarters

4

Source: Yahoo! Finance.

Will Johnson & Johnson make investors feel healthy this quarter?
In recent months, analysts have had mixed views on Johnson & Johnson’s earnings prospects. They’ve raised their consensus on the just-finished quarter by a penny per share, but they’ve pulled back on their full-year 2013 EPS outlook by $0.08 and cut 2014 estimates even more sharply. Yet the stock continues to perform well, rising more than 15% since early January.

Lately, Johnson & Johnson has presented two different faces to investors. On one hand, the company has faced the challenge of dealing with a weak consumer-products business, as multiple recalls and close regulatory oversight of its production facilities have exacerbated J&J’s problems. With its more focused consumer-goods business, Colgate-Palmolive has worked harder at taking advantage of international growth opportunities than many of its rivals, and Colgate’s strong overseas sales, in comparison to J&J’s international weakness, show the effectiveness of that strategy. In particular, Asia has been a focus point for Colgate, with revenue from the region having risen 9% year over year compared with less than 3% growth overall. Moreover, Latin America represents Colgate’s biggest region for sales, with more than half again the revenue its U.S. segment produces.

Yet in the pharmaceutical space, J&J has had great success. The approval of its Invokana treatment for type 2 diabetes bodes well for the company, as Invokana’s approach to treating the disease is completely different from that of competing products. In particular, Merck‘s Januvia appears to have some substantial disadvantages compared to the drug, and with Januvia’s patent set to expire in a few years, Invokana could have an even clearer path to success in the future. J&J

From: http://www.dailyfinance.com/2013/04/11/johnson-johnson-earnings-could-send-the-dow-higher/

Business, Finance, Occupation & Industry

Procter & Gamble's New Look for Old Spice

Leave a comment

By Demitrios Kalogeropoulos, The Motley Fool

Filed under:

Old Spice is getting some new digs. Procter & Gamble just unveiled a line of bar soaps aimed at freshening up the 75-year-old grooming brand.

Source: Procter & Gamble.

Already the leader in body wash sales for men, P&G is hoping its new product will appeal to the 40% of guys who prefer to use bar soap but don’t have many options as far as “manly scents” go.

It sure could use a sales spark. The company has been suffering through a slump lately. Sales increased by just 3% last year, while earnings fell by 7%. Profits were down, too, with gross margin slipping by 1.6 percentage points in 2012 after a 1.4-percentage-point drop the prior year. Worse yet, the company’s sales volumes didn’t improve over 2011, which left price increases as the sole engine for revenue growth last year. P&G blamed the weak global economy for helping to keep consumers away.

Still, competition had more than a little to do with P&G’s losses. Unilever notched a much stronger 7% rise in sales last year. And the company managed solid volume growth of better than 3%. Ditto for Colgate-Palmolive, which grew revenue and sales volumes by more than 2% last year.

P&G has since clawed back a bit of the market share it lost to rivals, and cost cuts have also helped boost P&G’s profits recently. However, it won’t get the serious business improvements it needs without rising sales volumes.

And that’s why innovation is critical to the company’s goals this year. It saw success with Tide brand Pods, which quickly grew into a disruptive sales leader in the laundry category. P&G says it has more of those types of “discontinuous innovations” in the pipeline, of the kind that “obsolete current products and create new categories and new brands.”

So investors can expect P&G to make a few more product announcements like this in the quarters ahead. Heavy spending on marketing is also in the cards, as the company looks to support all the new product rollouts. P&G has said that it expects big sales growth in the second half of the year. It’s time to start delivering on that goal.

If you’re on the lookout for high-yielding stocks, The Motley Fool has compiled a special free report outlining our nine top dependable dividend-paying stocks. It’s called “Secure Your Future With 9 Rock-Solid Dividend Stocks.” You can access your copy today at no cost! Just click here.

The article Procter & Gamble’s New Look for Old Spice originally appeared on Fool.com.

Fool contributor Demitrios Kalogeropoulos has no position in any stocks mentioned. The Motley Fool recommends Procter & Gamble and Unilever. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The

Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Why Colgate-Palmolive Is a Top Dividend Stock

Leave a comment

By Dan Caplinger, The Motley Fool

Filed under:

Investors have always been interested in stocks that pay dividends, but lately, low interest rates on bonds and other fixed-income investments have made solid dividend payers even more valuable. Among the most promising dividend stocks in the market is Colgate-Palmolive , and one big reason is that it is one of the few exclusive companies to make the list of Dividend Aristocrats. In order to become a member of this elite group, a company must have raised its dividend payouts to shareholders every single year for at least a quarter-century. Only a few dozen stocks manage to make the cut, and those that do tend to stay there for a long time.

Colgate-Palmolive is well-known for its impressive stable of consumer products. Doing business around the world, the company has delivered not only solid dividends for decades, but also the growth prospects that investors always like to see in a stock. Let’s take a closer look at Colgate-Palmolive to see whether it can sustain its long streak of rewarding dividend payouts to investors.

Dividend Stats on Colgate-Palmolive

 

  

Current Quarterly Dividend Per Share

$0.68*

Current Yield

2.3%

Number of Consecutive Years With Dividend Increases

50 years

Payout Ratio

47%

Last Increase

April 2013*

Source: Yahoo! Finance. Last increase refers to ex-dividend date. * Declared but not yet paid.

How has Colgate-Palmolive been treating shareholders lately?
As one of the best companies in America, Colgate has come from modest roots as a soap and toothpaste maker to become a global consumer-goods powerhouse. Even given the defensive nature of the sector, Colgate’s stock has performed extremely well, soaring to new all-time highs, and climbing more than 50% since early 2011.

Colgate’s overall growth strategy is largely behind the successful performance of its stock, as the company has tied its success to that of international markets across the globe. With a particular emphasis on Latin America, Colgate has prospered with strong financial results. By contrast, Procter & Gamble, the giant in the sector, has had trouble keeping its growth up in light of difficulties with product innovation, and a slowdown in its international growth. That has opened the door for Colgate to take a bigger role in the industry.

Yet, companies with strong track records of raising dividends for decades have generally had to overcome challenges along the way. Like many of its consumer-products peers, Colgate has had to face rising costs for some of the materials it needs to produce its goods. In order to keep its margins up, Colgate announced layoffs last fall amounting to about 6% of its workforce around the world. Despite those pressures, Colgate-Palmolive has managed to keep its payouts strong:

Colgate-Palmolive Dividend data by YCharts.

One big problem that hit Colgate recently was the devaluation of the Venezuelan bolivar currency. Colgate failed to be as proactive about the potential for a devaluation …read more

Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

1 Weird Trick to Become a Buffett Investor

Leave a comment

By Jeremy Phillips and Austin Smith, The Motley Fool

Filed under:

Austin Smith talks to Jeremy Phillips about one weird trick investors can use to emulate Warren Buffett.

Phillips reminds us that Buffett has said that people should invest as if the market were only open for one day every five years. Phillips advises investors to work toward buying stocks only one day, or maybe one week, per year, spending the remaining 51 weeks on research.

Asked for his opinion, Smith chimes in and says he loves this idea, which forces investors to think before they act and to buy for the long run. He admits, however, that this method may result in buying a great company at a slightly overvalued price, but he feels doing so is still a good move for the long term.

Phillips goes on to tell us that Zynga and Groupon won’t work with this strategy, because their businesses are changing rapidly. In contrast, Colgate-Palmolive does work using this model. Occupying an “extreme position of strength,” it’s been paying a dividend since 1895, and increasing it for the last 40+ years.

Saying that Colgate is one of his favorite personal investments, Smith adds Unilever  and Philip Morris to the mix, pitching them as companies that help him sleep well at night. He says they make sense for the same reason that Colgate does.

In short, Smith reminds investors to evaluate companies as companies, and not as moving stock prices. If there’s one lesson to learn, it’s this: Be patient.

Now, are you looking for more Buffett-esque ideas?

The Motley Fool’s chief investment officer has selected his own Buffett stock stock for this year. Find out which stock it is in the brand-new free repor “The Motley Fool’s Top Stock for 2013.” Just click here to access the report and find out the name of this under-the-radar company.

The article 1 Weird Trick to Become a Buffett Investor originally appeared on Fool.com.


Austin Smith owns shares of Unilever, Philip Morris International, Colgate-Palmolive, Colgate-Palmolive, and Colgate-Palmolive. Jeremy Phillips owns shares of Colgate-Palmolive. The Motley Fool recommends Unilever. The Motley Fool owns shares of Philip Morris International. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

(function(c,a){window.mixpanel=a;var b,d,h,e;b=c.createElement(“script”);
b.type=”text/javascript”;b.async=!0;b.src=(“https:”===c.location.protocol?”https:”:”http:”)+
‘//cdn.mxpnl.com/libs/mixpanel-2.2.min.js’;d=c.getElementsByTagName(“script”)[0];
d.parentNode.insertBefore(b,d);a._i=[];a.init=function(b,c,f){function d(a,b){
var c=b.split(“.”);2==c.length&&(a=a[c[0]],b=c[1]);a[b]=function(){a.push([b].concat(
Array.prototype.slice.call(arguments,0)))}}var g=a;”undefined”!==typeof f?g=a[f]=[]:
f=”mixpanel”;g.people=g.people||[];h=[‘disable’,’track’,’track_pageview’,’track_links’,
‘track_forms’,’register’,’register_once’,’unregister’,’identify’,’alias’,’name_tag’,
‘set_config’,’people.set’,’people.increment’];for(e=0;e<h.length;e++)d(g,h[e]);
a._i.push([b,c,f])};a.__SV=1.2;})(document,window.mixpanel||[]);
mixpanel.init("9659875b92ba8fa639ba476aedbb73b9");
…read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

What Happens to Stocks When the Fed Bids Farewell?

Leave a comment

By Morgan Housel and Austin Smith, The Motley Fool

Filed under:

Last week, the Federal Reserve reassured investors that it will keep its foot on the monetary gas pedal. This is good news for stocks — for the time being.

But what happens when the Fed decides to let up, reining in its super-loose money policies of the last five years?

investors naturally fear a big market pullback. And that may be what occurs. But in this video, Fool analysts Morgan Housel and Austin Smith discuss the other side of the story and why an end to easy money doesn’t necessarily mean the end of stocks.

The Motley Fool’s chief investment officer has selected his No. 1 stock for the next year. Find out which stock it is in the brand-new free report “The Motley Fool’s Top Stock for 2013.” Just click here to access the report and find out the name of this under-the-radar company.

The article What Happens to Stocks When the Fed Bids Farewell? originally appeared on Fool.com.

Fool contributor Morgan Housel owns shares of Altria Group, Procter & Gamble, and Philip Morris International. Austin Smith owns shares of Philip Morris International and Colgate-Palmolive. The Motley Fool recommends Procter & Gamble. The Motley Fool owns shares of Philip Morris International. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

(function(c,a){window.mixpanel=a;var b,d,h,e;b=c.createElement(“script”);
b.type=”text/javascript”;b.async=!0;b.src=(“https:”===c.location.protocol?”https:”:”http:”)+
‘//cdn.mxpnl.com/libs/mixpanel-2.2.min.js’;d=c.getElementsByTagName(“script”)[0];
d.parentNode.insertBefore(b,d);a._i=[];a.init=function(b,c,f){function d(a,b){
var c=b.split(“.”);2==c.length&&(a=a[c[0]],b=c[1]);a[b]=function(){a.push([b].concat(
Array.prototype.slice.call(arguments,0)))}}var g=a;”undefined”!==typeof f?g=a[f]=[]:
f=”mixpanel”;g.people=g.people||[];h=[‘disable’,’track’,’track_pageview’,’track_links’,
‘track_forms’,’register’,’register_once’,’unregister’,’identify’,’alias’,’name_tag’,
‘set_config’,’people.set’,’people.increment’];for(e=0;e<h.length;e++)d(g,h[e]);
a._i.push([b,c,f])};a.__SV=1.2;})(document,window.mixpanel||[]);
mixpanel.init("9659875b92ba8fa639ba476aedbb73b9");

function addEvent(obj, evType, fn, useCapture){
if (obj.addEventListener){
obj.addEventListener(evType, fn, useCapture);
return true;
} else if (obj.attachEvent){
var r = obj.attachEvent("on"+evType, fn);
return r;
}
}

addEvent(window, "load", function(){new FoolVisualSciences();})
addEvent(window, "load", function(){new PickAd();})

var themeName = 'dailyfinance.com';
var _gaq = _gaq || [];
_gaq.push(['_setAccount', 'UA-24928199-1']);
_gaq.push(['_trackPageview']);

(function () {

var ga = document.createElement('script');
ga.type = 'text/javascript';
ga.async = true;
ga.src = ('https:' == document.location.protocol ? 'https://ssl' : 'http://www') + '.google-analytics.com/ga.js';

var s = document.getElementsByTagName('script')[0];
s.parentNode.insertBefore(ga, s);
})();

<p style="clear: both;padding: …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

1 Simple Way Bernanke Beat Buffett

Leave a comment

By Austin Smith and Jeremy Phillips, The Motley Fool

Filed under:

Warren Buffett has one of the best track records in the investing world, if not the best. But that doesn’t mean you can’t do better. In the following video, Austin Smith and Jeremy Phillips discuss the fact that Federal Reserve Chairman Ben Bernanke once had only one stock in his portfolio — dividend rock star Altria. Although we don’t know how long Bernanke held this position, over the long run Altria has been one of the exceptionally rare stocks whose compound annual growth rate is superior to Warren Buffett‘s own measure of Berkshire’s performance, if only narrowly so.

But this isn’t a lesson in putting all your eggs in one basket and praying for Buffett-like performance, instead, it’s a lesson in pricing power. Altria has it, as do many of Buffett’s best investments. With this in mind, Jeremy and Austin reveal a few companies today that could be the Buffett-beaters of tomorrow.

If you’re on the lookout for more high-yielding stocks like Altria, The Motley Fool has compiled a special free report outlining our nine top dependable dividend-paying stocks. It’s called “Secure Your Future With 9 Rock-Solid Dividend Stocks.” You can access your copy today at no cost! Just click here.

The article 1 Simple Way Bernanke Beat Buffett originally appeared on Fool.com.


Austin Smith owns shares of Philip Morris International and and Colgate-Palmolive. Jeremy Phillips owns shares of Colgate-Palmolive. The Motley Fool recommends Procter & Gamble and owns shares of Philip Morris International. Try any of our Foolish newsletter services free for 30 days. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

(function(c,a){window.mixpanel=a;var b,d,h,e;b=c.createElement(“script”);
b.type=”text/javascript”;b.async=!0;b.src=(“https:”===c.location.protocol?”https:”:”http:”)+
‘//cdn.mxpnl.com/libs/mixpanel-2.2.min.js’;d=c.getElementsByTagName(“script”)[0];
d.parentNode.insertBefore(b,d);a._i=[];a.init=function(b,c,f){function d(a,b){
var c=b.split(“.”);2==c.length&&(a=a[c[0]],b=c[1]);a[b]=function(){a.push([b].concat(
Array.prototype.slice.call(arguments,0)))}}var g=a;”undefined”!==typeof f?g=a[f]=[]:
f=”mixpanel”;g.people=g.people||[];h=[‘disable’,’track’,’track_pageview’,’track_links’,
‘track_forms’,’register’,’register_once’,’unregister’,’identify’,’alias’,’name_tag’,
‘set_config’,’people.set’,’people.increment’];for(e=0;e<h.length;e++)d(g,h[e]);
a._i.push([b,c,f])};a.__SV=1.2;})(document,window.mixpanel||[]);
mixpanel.init("9659875b92ba8fa639ba476aedbb73b9");

function addEvent(obj, evType, fn, useCapture){
if (obj.addEventListener){
obj.addEventListener(evType, fn, useCapture);
return true;
} else if (obj.attachEvent){
var r = obj.attachEvent("on"+evType, fn);
return r;
}
}

addEvent(window, "load", function(){new FoolVisualSciences();})
addEvent(window, "load", function(){new PickAd();})

var themeName = 'dailyfinance.com';
var _gaq = _gaq || [];
_gaq.push(['_setAccount', 'UA-24928199-1']);
_gaq.push(['_trackPageview']);

(function () {

…read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Prevent Obamacare From Destroying Your Portfolio

Leave a comment

By Jeremy Phillips and Austin Smith, The Motley Fool

Filed under:

Obamacare has sent business owners and investors everywhere looking for answers about how to protect their portfolios from massive uncertainties. 

In the following video, Jeremy Phillips says his strategy for avoiding the pitfalls of decisions like Obamacare are to invest in companies that will thrive from one political cycle to the next. While it’s tempting to buy a company that could soar on a single political decision, it’s no way to invest and a sure way to destroy your wealth. 

Watch the video for one company that fits this mold.

Or if you’d like something a little more exciting in your portfolio, The Motley Fool’s chief investment officer has selected his No. 1 stock for the next year. Find out which stock it is in the brand-new free report: “The Motley Fool’s Top Stock for 2013.” Just click here to access the report and find out the name of this under-the-radar company.

The article Prevent Obamacare From Destroying Your Portfolio originally appeared on Fool.com.


Austin Smith and Jeremy Phillips own shares of Colgate-Palmolive. The Motley Fool owns shares of Papa John’s International and Sturm, Ruger Try any of our Foolish newsletter services free for 30 days. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

(function(c,a){window.mixpanel=a;var b,d,h,e;b=c.createElement(“script”);
b.type=”text/javascript”;b.async=!0;b.src=(“https:”===c.location.protocol?”https:”:”http:”)+
‘//cdn.mxpnl.com/libs/mixpanel-2.2.min.js’;d=c.getElementsByTagName(“script”)[0];
d.parentNode.insertBefore(b,d);a._i=[];a.init=function(b,c,f){function d(a,b){
var c=b.split(“.”);2==c.length&&(a=a[c[0]],b=c[1]);a[b]=function(){a.push([b].concat(
Array.prototype.slice.call(arguments,0)))}}var g=a;”undefined”!==typeof f?g=a[f]=[]:
f=”mixpanel”;g.people=g.people||[];h=[‘disable’,’track’,’track_pageview’,’track_links’,
‘track_forms’,’register’,’register_once’,’unregister’,’identify’,’alias’,’name_tag’,
‘set_config’,’people.set’,’people.increment’];for(e=0;e<h.length;e++)d(g,h[e]);
a._i.push([b,c,f])};a.__SV=1.2;})(document,window.mixpanel||[]);
mixpanel.init("9659875b92ba8fa639ba476aedbb73b9");

function addEvent(obj, evType, fn, useCapture){
if (obj.addEventListener){
obj.addEventListener(evType, fn, useCapture);
return true;
} else if (obj.attachEvent){
var r = obj.attachEvent("on"+evType, fn);
return r;
}
}

addEvent(window, "load", function(){new FoolVisualSciences();})
addEvent(window, "load", function(){new PickAd();})

var themeName = 'dailyfinance.com';
var _gaq = _gaq || [];
_gaq.push(['_setAccount', 'UA-24928199-1']);
_gaq.push(['_trackPageview']);

(function () {

var ga = document.createElement('script');
ga.type = 'text/javascript';
ga.async = true;
ga.src = ('https:' == document.location.protocol ? 'https://ssl' : 'http://www') + '.google-analytics.com/ga.js';

var s = document.getElementsByTagName('script')[0];
s.parentNode.insertBefore(ga, s);
})();

Read | <a target=_blank href="http://www.dailyfinance.com/2013/03/23/prevent-obamacare-from-destroying-your-portfolio/" …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Will Investors Smile After Colgate Split?

Leave a comment

By Rich Duprey, The Motley Fool

Filed under:

Fools know the value of a stock split: zero. It’s a non-event. Instead of a $20 bill in your wallet, you now have two $10 bills. So if they mean nothing, why do them? There are a few reasons, none of which has anything to do with whether the stock is a good investment. Here are the usual ones:

  • To make the stock look cheap.
  • To increase liquidity.
  • To meet stock-exchange listing requirements.
  • To express a bullish management sentiment.

Regardless of the reason, markets tend to view splits as positive events, and a company’s shares can get a short-term boost from the news. But if the company isn’t a good, long-term business, it doesn’t matter if its shares split, or whether you buy them before or after.

A split decision
Toothpaste maker Colgate-Palmolive intends to split its shares 2-to-1 on April 23 while raising its dividend almost 10% to $0.68 per share, twin moves that will undoubtedly leave shareholders smiling.

Shares are up 20% over the past year, recently hitting a record high of $116 a stub, as a robust business featuring growth in virtually every market boosted sales to $4.3 billion in the fourth quarter, a 2.5% increase from the year-ago period. Only in Europe did they remain flat.

The only blot on its record really was Colgate’s pet-food business, Hill’s Pet Nutrition, which accounted for 13% of total sales but saw a 1% drop in sales as pet owners shied away from lab-developed food in favor of going natural. 

As PetSmart can tell you, “pet parents” are increasingly concerned about what their “pet babies” are eating and are looking for food options that mimic human diets. The super-premium category is one of the driving forces behind the pet shop’s own growth trajectory and is behind its decision dedicate even more aisle space to the niche. As the humanization of pets gains momentum, consumers become more tolerant of the higher prices they have to pay, padding margins for producers and retailers alike.

A rose is a rose
Colgate was finally forced to give in to the trend, and it completely reformulated the Hill’s brand last year. Facing declining market share, it no longer prominently displays the “Science Diet” name on the label, instead featuring the new “Nature’s Best” brand along with the meats and natural ingredients.

But just because it’s gone natural, too, that doesn’t mean it’s going to be an easy sell. Pet owners are creatures of habit and tend to remain “sticky” when it comes to pet food for fear of disturbing Fluffy’s dietary system. Having once lost a customer to Blue Buffalo, Nestle‘s Purina One Beyond, or even PetSmart’s own proprietary line of super-premium food, Colgate will be hard-pressed to win him or her back.

Brushing up on growth
While a significant portion of total revenues, pet food is still second to toothpaste, and it’s there that Colgate investors get their toothy grin. The toothpaste maker owns almost 45% of the global …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Will Colgate-Palmolive Help You Retire Rich?

Leave a comment

By Dan Caplinger, The Motley Fool

Filed under:

Now more than ever, a comfortable retirement depends on secure, stable investments. Unfortunately, the right stocks for retirement won’t just fall into your lap. In this series, I look at 10 measures to show what makes a great retirement-oriented stock.

Conservative investors routinely turn to consumer-products stocks as defensive plays on the economy, and Colgate-Palmolive is one of the strongest such companies out there. Yet unusually, the stock has actually gotten huge amounts of investor attention lately, raising the question of whether its high-quality business justifies its current valuation. Let’s revisit how Colgate-Palmolive does on our 10-point scale.

The right stocks for retirees
With decades to go before you need to tap your investments, you can take greater risks, weighing the chance of big losses against the potential for mind-blowing returns. But as retirement approaches, you no longer have the luxury of waiting out a downturn.

Sure, you still want good returns, but you also need to manage your risk and protect yourself against bear markets, which can maul your finances at the worst possible time. The right stocks combine both of these elements in a single investment.

When scrutinizing a stock, retirees should look for:

  • Size. Most retirees would rather not take a flyer on unproven businesses. Bigger companies may lack their smaller counterparts’ growth potential, but they do offer greater security.
  • Consistency. While many investors look for fast-growing companies, conservative investors want to see steady, consistent gains in revenue, free cash flow, and other key metrics. Slow growth won’t make headlines, but it will help prevent the kind of ugly surprises that suddenly torpedo a stock‘s share price.
  • Stock stability. Conservative retirement investors prefer investments that move less dramatically than typical stocks, and they particularly want to avoid big losses. These investments will give up some gains during bull markets, but they won’t fall as far or as fast during bear markets. Beta measures volatility, but we also want a track record of solid performance as well.
  • Valuation. No one can afford to pay too much for a stock, even if its prospects are good. Using normalized earnings multiples helps smooth out one-time effects, giving you a longer-term context.
  • Dividends. Most of all, retirees look for stocks that can provide income through dividends. Retirees want healthy payouts now and consistent dividend growth over time — as long as it doesn’t jeopardize the company’s financial health.

With those factors in mind, let’s take a closer look at Colgate-Palmolive.

Factor

What We Want to See

Actual

Pass or Fail?

Size

Market cap > $10 billion

$52.4 billion

Pass

Consistency

Revenue growth > 0% in at least four of five past years

4 years

Pass
 

Free cash flow growth > 0% in at least four of past five years

2 years

Fail

Stock stability

Beta < 0.9

0.44

Pass
 

Worst loss in past five years no …read more
Source: FULL ARTICLE at DailyFinance
Business, Finance, Occupation & Industry

Should I Buy WPP?

Leave a comment

By Harvey Jones, The Motley Fool

Filed under:

LONDON — It’s time to go shopping for shares again, but where to start? There are loads of great stocks to choose from, and I’ve got my wallet out. So should I buy WPP ?

Ad men
If you want to know how to get ahead in advertising, ask WPP. It’s one of the world’s largest advertising and marketing groups, an established presence in both developed and emerging markets, notably China. It owns several agencies, including Ogilvy & Mather, and boasts a raft of big-name clients including American Express, Colgate-Palmolive, GlaxosmithKline, HSBC, McDonald’s, Microsoft, Nestle, Unilever, and Vodafone. Impressive. So should I buy it?

Ugly beautiful
The market likes this stock, and with good reason. WPP has enjoyed a relentless run of share-price growth, up 85% over five years, 67% over three years, and 30% over 12 months. Its recently published full-year results beat expectations to deliver a 7% rise in profits before tax to 1.3 billion pounds. 2012 revenues rose 2.9% to 10.37 billion pounds, the second successive year revenues have topped 10 billion pounds. WPP may look like a rare beauty, with operating margins hitting a record high of 14.8%, but it got there the ugly way, admits CEO Martin Sorrell. Although it posted 4% growth, difficult market conditions sparked a 1% drop in like-for-like revenues.

As football managers say, there’s an art to winning ugly. WPP has shown it has the resilience to what Sorrell calls the four “grey swans” of global uncertainty: Europe, the Middle East, China, and the U.S. Strong global diversification helps, with a powerful performance across Asia-Pacific, Latin America, the Middle East, and Africa offsetting weakness in the U.S. and Europe. 2013 looks like another tough year, with the U.S. a particular worry, although WPP expects the 2014 World Cup in Brazil to lift everybody’s spirits. Its forward-looking digital strategy should also reap rewards, as more companies switch their efforts online.

Reaping dividends
After a few days to digest the results, brokers came out in favour of WPP, which currently trades at 10.76 pounds. Last week, JP Morgan lifted its target price from 10.54 pounds to 12.82 pounds and maintained its overweight rating. Goldman Sachs has hiked its target price from 11.05 pounds to 11.55 pounds, while Investec lifted its target price by 25 pence to 11.75 pounds. Both rate WPP a buy. If you like this stock, you’re in good company. WPP isn’t the biggest-yielding stock on the FTSE 100 at just 2.6% a year, but management is pursuing a progressive dividend policy and has just hiked its payout by a mighty 16%. Since the dividend is covered 2.7 times, there should be scope for future growth. The yield is forecast to rise to 3.4% by Dec. 2014.

These are tricky conditions for advertising and marketing companies, and projected earnings-per-share (EPS) growth of 3% in 2013 reflect that, but that should rise to 10% in 2014. WPP isn’t cheap, trading at 14 times earnings and on a PEG ratio of 1.5, but that’s hardly surprising, …read more
Source: FULL ARTICLE at DailyFinance