Colgate-Palmolive (NYSE:CL) announced last week that it would be increasing its dividend payments yet again, from $0.45 to $0.44. The one-cent increase is a modest 2.3% hike but it means investors will be collecting a little bit more from this reliable Dividend King. Colgate has been paying dividends for more than a century and it has hiked its payouts for 50+ years in a row.
The increases haven't been huge but investors who have held on to the stock over the years are earning more on their original investments. The current quarterly payment of $0.45 is 15.4% higher than the $0.39 that the company was paying five years ago. That averages out to a compounded annual growth rate of 2.9%. At that rate, it would take approximately 25 years for the dividend to double in value.
Modest rate hikes are what you will come to expect with the stock, plus a lot of stability. But there is potential for the stock to become an even better buy over the long term.
Its household products are in staples all over the world and last year as consumers were buying up day-to-day essentials, its sales rose 5% to $16.5 billion. That's a big change from 2019 where its top line was flat from the previous year. In a future that may be more focused on cleanliness, Colgate could benefit from changing trends. From soaps to toothpaste to cleaning products, it is well-positioned to meet the needs of consumers.
Over the past 12 months, the stock is up 18%.
