Investing Ideas

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All-American stock #3: Colgate-Palmolive (CL)

07-04-2009

From: BloggingStocks

My final all-American brand is Colgate-Palmolive (NYSE: CL). The company is well-known for its toothpaste and toothbrushes. But Colgate-Palmolive also owns dozens of strong brand names, including Irish Spring, Speed Stick, Ajax, and many others.

Some investors may think of Colgate-Palmolive as a dull stock. That's fine by me.

The shares are far less volatile than most stocks on Wall Street. Even though the market overall is well below the highs it reached in the third quarter of 2007, shares of Colgate-Palmolive were never punished nearly as hard.

During a recession, folks don't really cut back on their toothpaste and deodorant. The stock has a very good shot at making a new all-time high very soon. There aren't many banks that can say that.

Not only did Colgate-Palmolive manage to grow its earnings last year, but I currently project that the company will grow its earnings again in 2009 as well. Earlier this year the company raised its dividends by 10% and in April said they were comfortable with Wall Street's second-quarter earnings forecast.

At the current price, the stock pays a dividend of 2.4%, which is about as much as a five-year Treasury bond. Ben Bernanke may be snapping up Treasuries left and right, but a stock like Colgate-Palmolive is a far better long-term investment.