Financial Research Report
1. The rationale for choosing Colgate-Palmolive as a company for potential investors
Colgate-Palmolive is a global company that needs no further introduction to potential investors. Although best known for its namesake Colgate brand of oral hygiene products, the company's stable of brand names extends far beyond applications for the mouth. The company is also the proprietor of Irish springs soap, Speed Stick deodorant, Palmolive dish soap, and even Science Diet pet foods. The super company has more than 40 brands, which reach consumers in more than 200 countries around the world, covering almost all the continents of the world. In 2011, it reported $17 billion in total revenue and $2.4 billion in earnings. Additionally, the company employs a staggering 39,000 people. Over the last four years, and assuming recent trends continue, the company will have spent more than $1 billion on research and development alone, trying to make better products for its customers and higher profits for shareholders. As its 2011 annual report put it: "At Colgate, developing innovative new products is a key driver of profitable growth. With the huge number of workforce, about 25% of its workers have been with the company for over 20 years. Some of the common themes they cite are great benefits, employee development programs, a positive work-life balance, and flexible hours. Most importantly, Shareholders have been very happy with the progress the company has been making. Over the last five years, the consumer-goods giant has notched an average return on capital of 35.7%, and its shares have returned an impressive 65% including dividends. This beat the S&P 500 index by more than 50 percentage points, and outpaced competitors like Procter & Gamble and Unilever by 12 and 39 percentage points, respectively. Not to mention, Colgate has paid uninterrupted dividends on its common stock since 1895, has increased payouts every year for 49 years, and currently yields a respectable 2.3%. In 2010,
Colgate-Palmolive is a global company that needs no further introduction to potential investors. Although best known for its namesake Colgate brand of oral hygiene products, the company's stable of brand names extends far beyond applications for the mouth. The company is also the proprietor of Irish springs soap, Speed Stick deodorant, Palmolive dish soap, and even Science Diet pet foods. The super company has more than 40 brands, which reach consumers in more than 200 countries around the world, covering almost all the continents of the world. In 2011, it reported $17 billion in total revenue and $2.4 billion in earnings. Additionally, the company employs a staggering 39,000 people. Over the last four years, and assuming recent trends continue, the company will have spent more than $1 billion on research and development alone, trying to make better products for its customers and higher profits for shareholders. As its 2011 annual report put it: "At Colgate, developing innovative new products is a key driver of profitable growth. With the huge number of workforce, about 25% of its workers have been with the company for over 20 years. Some of the common themes they cite are great benefits, employee development programs, a positive work-life balance, and flexible hours. Most importantly, Shareholders have been very happy with the progress the company has been making. Over the last five years, the consumer-goods giant has notched an average return on capital of 35.7%, and its shares have returned an impressive 65% including dividends. This beat the S&P 500 index by more than 50 percentage points, and outpaced competitors like Procter & Gamble and Unilever by 12 and 39 percentage points, respectively. Not to mention, Colgate has paid uninterrupted dividends on its common stock since 1895, has increased payouts every year for 49 years, and currently yields a respectable 2.3%. In 2010,