The shares of Colgate-Palmolive Co. (CL) reached a new 52-week high of $117.36 on Tuesday, Mar 26, gaining momentum from the company’s consistent performance as well as an encouraging outlook. This Zacks Rank #3 (Hold) global consumer products company eventually closed at $117.32, recording a healthy return of 24.1% over the past year. Average volume of shares traded over the last 3 months stands at approximately 1,744,780.
Besides Colgate, other stocks in the retail space that touched all-time highs in the recent weeks are Constellation Brands Inc. (STZ), The Clorox Company (CLX) and Campbell Soup Company (CPB).
An impressive record of either meeting or beating the quarterly earnings expectations, a positive fiscal 2013 outlook and a decent dividend yield are the factors that enabled the shares of Colgate to reach a new high. Moreover, the stock currently trades at a forward P/E of 20.4x, at a slight premium from the peer group average of 20.2x.
With respect to earnings surprises, Colgate has either met or surpassed the Zacks Consensus Estimate for the last several quarters, most recently topping it by 0.71% in the fourth quarter of fiscal 2012.
On Jan 31, Colgate posted impressive quarterly results with strong earnings and sales comparisons for the fourth quarter of fiscal 2012. The company posted adjusted earnings of $1.41 per share that came a penny ahead of the Zacks Consensus Estimate and jumped 8.5% year over year.
Global sales of $4,286 million inched up nearly 2.7% from the prior-year quarter level of $4,172 million, primarily benefiting from a 2.5% upside in pricing and 1.5% increase in global unit volumes (excluding divested businesses), partially offset by a negative impact of 1.5% from foreign exchange.
The company’s adjusted gross profit margin expanded 90 basis points (bps) to 58.6%, driven by increased prices as well as cost savings from the company’s funding-the-growth initiatives.
Looking ahead, Colgate-Palmolive anticipates its growth momentum to continue in fiscal 2013 with gross margin expansion and double-digit growth in earnings per share. However, lingering macroeconomic concerns in Venezuela will remain a drag on its financials in the coming quarters.
Colgate is also known for its shareholder friendly moves. The company has been regularly increasing its dividend every year since 2001, presently paying an annual cash dividend of $2.48. This currently yields a solid 2.1%, while the company has a payout ratio of 47%.
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