Colgate-Palmolive Company (NYSE: CL) and Procter & Gamble Company (The) (NYSE:PG) are both large-cap consumer staples companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, profitabiliy, earnings, analyst recommendations, institutional ownership, dividends and valuation.

Analyst Recommendations

This is a summary of current recommendations and price targets for Colgate-Palmolive Company and Procter & Gamble Company (The), as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Colgate-Palmolive Company 0 12 2 0 2.14
Procter & Gamble Company (The) 2 8 5 0 2.20

Colgate-Palmolive Company presently has a consensus price target of $74.75, indicating a potential downside of 2.80%. Procter & Gamble Company (The) has a consensus price target of $92.00, indicating a potential upside of 2.38%. Given Procter & Gamble Company (The)’s stronger consensus rating and higher probable upside, analysts clearly believe Procter & Gamble Company (The) is more favorable than Colgate-Palmolive Company.

Volatility and Risk

Colgate-Palmolive Company has a beta of 0.82, indicating that its share price is 18% less volatile than the S&P 500. Comparatively, Procter & Gamble Company (The) has a beta of 0.65, indicating that its share price is 35% less volatile than the S&P 500.

Earnings & Valuation

This table compares Colgate-Palmolive Company and Procter & Gamble Company (The)’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Colgate-Palmolive Company $15.20 billion 4.47 $4.43 billion $2.77 27.76
Procter & Gamble Company (The) $65.08 billion 3.53 $17.85 billion $5.46 16.46

Procter & Gamble Company (The) has higher revenue and earnings than Colgate-Palmolive Company. Procter & Gamble Company (The) is trading at a lower price-to-earnings ratio than Colgate-Palmolive Company, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

74.1% of Colgate-Palmolive Company shares are owned by institutional investors. Comparatively, 60.2% of Procter & Gamble Company (The) shares are owned by institutional investors. 1.0% of Colgate-Palmolive Company shares are owned by company insiders. Comparatively, 0.4% of Procter & Gamble Company (The) shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Colgate-Palmolive Company and Procter & Gamble Company (The)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Colgate-Palmolive Company 16.31% 3,725.55% 20.54%
Procter & Gamble Company (The) 23.14% 19.30% 8.69%

Dividends

Colgate-Palmolive Company pays an annual dividend of $1.60 per share and has a dividend yield of 2.1%. Procter & Gamble Company (The) pays an annual dividend of $2.76 per share and has a dividend yield of 3.1%. Colgate-Palmolive Company pays out 57.8% of its earnings in the form of a dividend. Procter & Gamble Company (The) pays out 50.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Colgate-Palmolive Company has increased its dividend for 53 consecutive years and Procter & Gamble Company (The) has increased its dividend for 60 consecutive years. Procter & Gamble Company (The) is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Procter & Gamble Company (The) beats Colgate-Palmolive Company on 10 of the 17 factors compared between the two stocks.

About Colgate-Palmolive Company

Colgate-Palmolive Company (Colgate) is a consumer products company. The Company operates in two product segments: Oral, Personal and Home Care, and Pet Nutrition. The Oral, Personal and Home Care product segment is operated through five geographic segments, which include North America, Latin America, Europe, Asia Pacific and Africa/Eurasia. The Company’s oral care products include Colgate Total, Colgate Sensitive Pro-Relief, Colgate Max Fresh and Colgate Optic White. The Company is also engaged in various product categories of the personal care market with operations in liquid hand soap, which it sells under the Palmolive, Protex and Softsoap brands. The Company manufactures and markets a range of products for the home care market, including Palmolive and Ajax dishwashing liquids, Fabuloso and Ajax household cleaners and Murphy’s Oil Soap. The Company, through its Hill’s Pet Nutrition segment (Hill’s), manufactures pet nutrition products for dogs and cats.

About Procter & Gamble Company (The)

The Procter & Gamble Company is focused on providing branded consumer packaged goods to the consumers across the world. The Company operates through five segments: Beauty; Grooming; Health Care; Fabric & Home Care, and Baby, Feminine & Family Care. The Company sells its products in approximately 180 countries and territories primarily through mass merchandisers, grocery stores, membership club stores, drug stores, department stores, distributors, baby stores, specialty beauty stores, e-commerce, high-frequency stores and pharmacies. The Company owns and operates approximately 20 manufacturing sites located in over 20 states in the United States. In addition, it owns and operates over 100 manufacturing sites in approximately 40 countries. It offers products under the brands, such as Olay, Old Spice, Safeguard, Head & Shoulders, Pantene, Rejoice, Mach3, Prestobarba, Venus, Cascade, Dawn, Febreze, Mr. Clean, Bounty and Charmin.

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