雅虎香港財經 Colgate's (CL) Strategic Efforts Seem Prudent: Apt to Hold?
Colgate-Palmolive Company CL stock is doing well on the bourses, thanks to its robust strategic efforts. The company has been gaining from pricing and productivity initiatives for a while now. Its innovation strategy and shareholder-friendly moves also bode well.
Shares of this renowned consumer goods company have gained 26.3% in the past six months compared with the industry’s 17.8% growth. A VGM Score of B further adds strength to this Zacks Rank #3 (Hold) company.
Let’s Delve Deeper
Colgate has been gaining from strong pricing and the benefits of funding-the-growth program and other productivity initiatives. The company has been implementing aggressive pricing for the last few quarters, which boosted margins in the first quarter. The gross profit margin expanded 310 basis points to 60% on both GAAP basis and adjusted basis. As a result, adjusted basis earnings advanced 18% from the prior-year period.
Additionally, the company’s innovation strategy is focused on growing in adjacent categories and product segments. It is focused on the premiumization of its Oral Care portfolio through major innovations. Backed by premium innovation, products including CO. by Colgate, Colgate Elixir toothpaste and Colgate enzyme whitening toothpaste have been performing well.
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Also, at-home whitening and professional whitening products bode well. The company’s Oral Care business has also been performing well. Some other notable efforts include the continued expansion of the Naturals and Therapeutics divisions as well as the Hello Products LLC buyout.
Regarding its shareholder-friendly efforts, Colgate is committed to rewarding shareholders with share buybacks and dividend payouts. Recently, it paid a dividend of 50 cents a share. On an annualized basis, the dividend rate is $2.00, up from $1.92 per share paid previously. Markedly, the company has paid uninterrupted dividends since 1895.
On the flip side, Colgate has been battling a tough macroeconomic landscape including inflationary pressures. Raw material inflation and the continued rise in packaging costs act as a deterrent to its profitability. In addition, the company has been witnessing continued volume softness in China and the headwind from lower private label growth as it transferred Hill’s volume into the pet nutrition manufacturing network.
Nonetheless, the aforesaid strengths have helped the company deliver robust top-line performance in the first quarter of 2024. Also, accelerated revenue-growth management plans aided Colgate’s organic sales in the quarter. Net sales jumped 6.2% year over year while the metric advanced 9.8% on an organic basis.
The sales momentum was mainly driven by organic sales growth in each of the six divisions and across all four categories. Further, total volumes were up 1.3% year over year on an organic and reported basis, attributed to sequential growth in North America and Europe. Meanwhile, pricing improved 8.5%, backed by positive pricing across all six divisions.
Stocks to Consider
Freshpet FRPT, which is a pet food company, currently sports a Zacks Rank #1 (Strong Buy). FRPT has a trailing four-quarter earnings surprise of 118.2%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Freshpet’s current financial-year sales and earnings per share (EPS) indicates growth of 24.8% and 177.1%, respectively, from the year-ago reported numbers.
Vital Farms Inc. VITL offers a range of produced pasture-raised foods. It currently sports a Zacks Rank of 1. VITL has a trailing four-quarter average earnings surprise of 102.1%.
The consensus estimate for Vital Farms’ current financial-year sales and earnings implies growth of 22.5% and 59.3%, respectively, from the year-ago reported numbers.
Utz Brands Inc. UTZ, which manufactures a diverse portfolio of salty snacks, currently carries a Zacks Rank #2 (Buy). UTZ has a trailing four-quarter earnings surprise of 2%, on average.
The Zacks Consensus Estimate for Utz Brands’ current financial-year EPS indicates growth of 26.3% from the year-ago reported numbers.
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Colgate-Palmolive Company (CL) : Free Stock Analysis Report
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