Dividends4Life: Colgate Stock Is a Long-Term Dividend Play That’s Second to None

Okay, before you complain that the dividend yield on Colgate-Palmolive (CL) is only 2.3%, please remember that we’re talking about Colgate stock — a dividend stock that has made rising payments for half-a-century while killing the market on a total return basis. Given that starting point, it’s hard to find a better forever dividend holding than Colgate stock. That’s why it makes the InvestorPlace list of dependable dividend stocks.

But here’s the key if you’re worried about valuation. Price-to-earnings multiples cycle up and down through bull and bear markets, usually reverting to their mean. As long as a stock isn’t ridiculously overpriced, it won’t take a decade or more to work off the excess a la Microsoft (MSFT) in the 2000s. Heck, CL has paid uninterrupted dividends since 1895. Through the Great Depression, two world wars and the Great Recession, Colgate never once missed a payment. Even better, Colgate has increased its dividend every year for 50 years. Don’t forget that dividend hikes are an income investor’s best friend because they make the yield on the original cost basis rise far past the quoted current yield.

Source: InvestorPlace

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