Head-To-Head Contrast: Spectrum Brands (NYSE:SPB) versus Colgate-Palmolive (NYSE:CL)

Colgate-Palmolive (NYSE:CL) and Spectrum Brands (NYSE:SPB) are both consumer staples companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, dividends, risk, valuation, earnings and institutional ownership.

Volatility & Risk

Colgate-Palmolive has a beta of 0.33, meaning that its stock price is 67% less volatile than the S&P 500. Comparatively, Spectrum Brands has a beta of 0.65, meaning that its stock price is 35% less volatile than the S&P 500.

Profitability

This table compares Colgate-Palmolive and Spectrum Brands’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Colgate-Palmolive	9.68%	464.63%	18.34%
Spectrum Brands	2.76%	10.06%	5.49%

Earnings & Valuation

This table compares Colgate-Palmolive and Spectrum Brands”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Colgate-Palmolive	$20.38 billion	3.41	$2.13 billion	$2.52	34.55
Spectrum Brands	$2.81 billion	0.71	$99.70 million	$3.28	26.39

Colgate-Palmolive has higher revenue and earnings than Spectrum Brands. Spectrum Brands is trading at a lower price-to-earnings ratio than Colgate-Palmolive, indicating that it is currently the more affordable of the two stocks.

Dividends

Colgate-Palmolive pays an annual dividend of $2.12 per share and has a dividend yield of 2.4%. Spectrum Brands pays an annual dividend of $1.88 per share and has a dividend yield of 2.2%. Colgate-Palmolive pays out 84.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Spectrum Brands pays out 57.3% of its earnings in the form of a dividend. Colgate-Palmolive has raised its dividend for 63 consecutive years and Spectrum Brands has raised its dividend for 1 consecutive years. Colgate-Palmolive is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for Colgate-Palmolive and Spectrum Brands, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Colgate-Palmolive	0	7	12	0	2.63
Spectrum Brands	0	4	3	0	2.43

Colgate-Palmolive currently has a consensus price target of $99.00, indicating a potential upside of 13.71%. Spectrum Brands has a consensus price target of $98.83, indicating a potential upside of 14.16%. Given Spectrum Brands’ higher probable upside, analysts clearly believe Spectrum Brands is more favorable than Colgate-Palmolive.

Institutional and Insider Ownership

80.4% of Colgate-Palmolive shares are owned by institutional investors. 0.4% of Colgate-Palmolive shares are owned by company insiders. Comparatively, 4.5% of Spectrum Brands shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Colgate-Palmolive beats Spectrum Brands on 12 of the 17 factors compared between the two stocks.

About Colgate-Palmolive

Colgate-Palmolive Company, together with its subsidiaries, manufactures and sells consumer products in the United States and internationally. It operates through two segments: Oral, Personal and Home Care; and Pet Nutrition. The Oral, Personal and Home Care segment offers toothpaste, toothbrushes, mouthwash, bar and liquid hand soaps, shower gels, shampoos, conditioners, deodorants and antiperspirants, skin health products, dishwashing detergents, fabric conditioners, household cleaners, and other related items. This segment markets and sells its products under various brands, which include Colgate, Darlie, elmex, hello, meridol, Sorriso, Tom's of Maine, Irish Spring, Palmolive, Protex, Sanex, Softsoap, Lady Speed Stick, Speed Stick, EltaMD, Filorga, PCA SKIN, Ajax, Axion, Fabuloso, Murphy, Suavitel, and Soupline to a range of traditional and eCommerce retailers, wholesalers, and distributors. It includes pharmaceutical products for dentists and other oral health professionals. Its Pet Nutrition segment offers pet nutrition products for everyday nutritional needs under the Hill's Science Diet brand; and a range of therapeutic pet products to help nutritionally support dogs and cats in different stages of health under the Hill's Prescription Diet brand. This segment markets and sells its products through pet supply retailers, veterinarians, and eCommerce retailers. Colgate-Palmolive Company was founded in 1806 and is headquartered in New York, New York.

About Spectrum Brands

Spectrum Brands Holdings, Inc. operates as a branded consumer products and home essentials company in North America, Europe, the Middle East, Africa, and Asia-Pacific regions. It operates through three segments: Home and Personal Care; Global Pet Care; and Home and Garden. The Home and Personal Care segment provides home appliances under the Black & Decker, Russell Hobbs, George Foreman, PowerXL, Emeril Legasse, Copper Chef, Toastmaster, Juiceman, Farberware, and Breadman brands; and personal care products under the Remington brand. The Global Pet Care segment provides dog and cat chews, treats, wet and dry foods, dog and cat clean-up and food, training, health and grooming, indoor birds, and small animal food and care products under the Good'n'Fun, DreamBone, GOOD BOY, SmartBones, IAMS, EUKANUBA, Nature's Miracle, FURminator, Dingo, 8IN1, Meowee!, and Wild Harvest brands. This segment also offers aquarium kits, stand-alone tanks, and aquatics equipment and consumables under the Tetra, Marineland, Instant Ocean, GloFish, and OmegaSea brands. The Home and Garden segment provides outdoor insect and weed control solutions, and animal repellents under the Spectracide, Garden Safe, Liquid Fence, and EcoLogic brands; household pest control solutions under the Hot Shot, Black Flag, Real-Kill, Ultra Kill, The Ant Trap, and Rid-A-Bug brand names; household surface cleaning, maintenance, and restoration products, including bottled liquids, mops, wipes, and markers under the Rejuvenate brand name; and personal-use pesticides and insect repellent products under the Cutter and Repel brands. The company sells its products through retailers, e-commerce and online retailers, wholesalers, and distributors. Spectrum Brands Holdings, Inc. was founded in 1906 and is headquartered in Middleton, Wisconsin.