Dividends4Life: Dividend Check-up: Colgate-Palmolive

Dividend Check-up: Colgate-Palmolive

Posted by D4L | Monday, February 14, 2011 | | 0 comments »

In this series, we analyze financial metrics to begin answering the following questions about a company's dividend: 1. Over time, has this company steadily increased its payouts?, 2. How sustainable is the dividend? and 3. Does the company have room to further increase the dividend? Today's pupil is Colgate-Palmolive (NYSE: CL), which posts a 2.8% yield.

Colgate-Palmolive has paid uninterrupted dividends since 1895. How's that for a dividend history? Over the past five years, it has continued its commitment to dividends by raising its payout broadly in line with earnings-per-share growth. A score of "B" is very good, but it's below Colgate-Palmolive's previous years' scores of "A" in 2009 and "B+" in 2007 and 2008. The reason is that free cash flow to equity has decreased slightly, but it can be a volatile data point, so for now there isn't a major reason for concern.

Source: Motley Fool

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