Colgate-Palmolive Company (NYSE:CL) has become one of the best companies in America by sticking to its devotion to innovation. Even though it’s only a fraction the size of its larger rivals, Colgate has held its own in markets throughout the world with its product lineup.
In particular, Colgate has done a good job of catching up with The Procter & Gamble Company (NYSE:PG), which has left the door open for Colgate to expand broadly in emerging markets. In particular, Latin America has become an increasingly important market for Colgate, and growth there has helped drive impressive results for the company. At the same time, making sure that margins stay wide has given Colgate a competitive advantage over Kimberly Clark Corp (NYSE:KMB) and Unilever plc (ADR) (NYSE:UL) in dealing with the raw-materials cost increases that companies throughout the consumer-products industry have had to deal with lately.
In its most recent quarter, Colgate-Palmolive Company (NYSE:CL) continued to show favorable performance compared with Procter & Gamble and its other peers. Although growth in the Latin American segment slowed somewhat, the company still did well in the key markets of Brazil and Mexico. Weakness in Venezuela, which subsequently devalued its currency and gave Colgate another hit, was responsible for a big part of the company’s failing to hit analysts’ revenue estimates.
For retirees and conservative investors, nearly half a century of healthy dividend increases is certainly a compelling reason to own Colgate-Palmolive. But even with the growth potential that emerging markets provide the company, it’s hard to justify paying such a high earnings multiple for Colgate-Palmolive Company (NYSE:CL). If investors grow weary of defensive plays and sell off the stock, then it would make a smarter buy for a retirement portfolio.
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The article Will Colgate-Palmolive Help You Retire Rich? originally appeared on Fool.com and is written by Dan Caplinger.
Fool contributor Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends Kimberly-Clark, Procter & Gamble, and Unilever.
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