This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and check out other Battle of the Brands posts.
As far as toothpaste goes, I was raised on Crest. My entire childhood, it was always Crest. Except when I spent the night at Grandma's and Grandpa's. They had Colgate. What a treat! Here are some facts about both...
Colgate toothpaste is the flagship product of Colgate-Palmolive Co. (NYSE: CL), an international operation in more than 200 countries. Total sales were almost $13.8 billion in 2007, the highest ever for the company, and it's notable that 75% of the sales were made outside the United States. Net income was up 28% to $1.7 billion for the year. Toothpaste is one of many personal care products that the company makes, including toothbrushes, soaps, and deodorants. The oral care products accounted for 40% of Colgate's sales in 2007.
Colgate-Palmolive (NYSE: CL) reported Q1 results on Wednesday. By now, you know the drill when it comes to consumer-products companies -- weak-dollar-helped-and-commodity-costs-did-not-help. I gotta say, though, that Colgate-Palmolive showed that vigilance in terms of costs can have a positive impact, and that a business does not have to be defined by inflation.
Net sales exploded to the upside by more than 15% (again, currency effects). Net income likewise charged higher, rising 17% to 90 cents per share on an adjusted basis. I know -- superlatives such as "exploded" and "charged higher" might seem a bit hyper here, but it's always cool when a consumer-products company hits those double-digit increases. Colgate-Palmolive, like Clorox (NYSE: CLX) and Procter & Gamble (NYSE: PG), leverages its stable of brands to drive growth in cash flows (Procter & Gamble, by the way, also recently reported quarterly results). This worked like a charm, since cash flow from operations during the past three-month period increased 17%. Way to go, management. Margins, however, were pressured, as can be expected, and they will continue to be pressured in the near future.
The earnings release mentioned the flagship Colgate toothpaste product -- I am a user of the brand, and in fact, I bought a new variety earlier this week. I've said it before and I'll say it again -- the supermarket is full of investing ideas, and Colgate-Palmolive is one of them. The company had a great quarter, it beat expectations according to Briefing.com -- albeit by the usual suspect, namely the "proverbial penny" -- and it seems solid enough. A potential core holding, Colgate-Palmolive should do well over the coming year. Yesterday's 6.7% drop in the price of the shares could have been seen as a buying opportunity for patient, long-term investors, but I'll concede that the stock could languish for a little while.
Disclosure: I don't own shares in any of the companies mentioned; positions can change at any time.
Profit rose to $2.71 billion, or 82 cents per share, compared with $2.51 billion, or 74 cents per share, a year ago. Revenue rose 9% to $20.46 billion from $18.69 billion last year. The Cincinnati-based company was expected to earn 81 cents on revenue of $21.44 billion, according to Thomson Financial.
"P&G delivered strong results in-line with long-term targets in a challenging economic and competitive environment with broad-based sales and share growth, earnings growth and overhead cost improvement," said Chief Executive AG Lafley in the earnings release.
Shares of the maker of Tide (my favorite detergent) and Pampers (our family's preferred diaper for my son) have slumped more than 10% this year under-performing rivals including Church & Dwight Co. (NYSE: CHD) and Colgate-Palmolive Co. (NYSE: CL). Uniliver Plc. (NYSE: UL) has fared slightly worse than P&G.
Kimberly-Clark (NYSE: KMB) reported for the first quarter today. Net sales increased almost 10% to $4.8 billion. Adjusted earnings per share increased 5% to $1.08. That's a rather small jump, granted, but you know something, it was enough to keep the stock in the green (at the time of this writing, at least) instead of in the red on a day when the major market averages -- and just about all of the stocks in my personal portfolios -- are bathing in the evil crimson color of doom. And according to Briefing.com, Kimberly-Clark played the beat-the-expectations game and won by the proverbial penny! Shareholders should be pleased.
A non-pleasing item to be found in the release centers on cash from operations -- it decreased by about $100 million to $426 million due to changes in working capital. That doesn't concern me so much right now, though, since Kimberly-Clark will probably do well over the coming years in terms of cash generation. The company, by the way, has been repurchasing stock, so management seems pleased with the shares as a potential investment idea.
Kimberly-Clark, which is a consumer-products business in the league of entities such as Procter & Gamble (NYSE: PG), Energizer (NYSE: ENR), Colgate-Palmolive (NYSE: CL), and Unilever (NYSE: UL), could be a value right now based on its P/E ratio and dividend yield. Out of the stocks mentioned here, I like P&G the best, but I do respect Kimberly-Clark -- in fact, it was mentioned recently in an article by Steven Halpern that centered on an analyst's picks for quality and yield.
Disclosure: I don't own shares in any of the companies mentioned; positions can change at any time.
WD-40 (NASDAQ: WDFC) issued its Q2 earnings report yesterday after the close of the market trading session -- and it wasn't full of great news. The top line was essentially flat as net sales dipped 0.5% to almost $79 million. Earnings came in at $0.51 per diluted share versus $0.52 per diluted share in the year-ago time frame.
Another negative aspect to the report was the statement of cash flows. WD-40 took in a lot less in terms of net cash from operations this time around, as changes in working capital and other items affected the flow. There's also a lot less cash on the balance sheet. And, sorry to say shareholders, but WD-40 missed analyst expectations by the proverbial penny. Investors shouldn't always be concerned with Wall Street expectations, but here's something that shareholders will be concerned with: the company lowered its earnings outlook. Management says that revenue growth will probably be somewhere between 4% and 8% as opposed to the originally expected range of between 7% and 10% -- any hopes for double-digit appreciation are now history. Net income per share is now expected to fall in a range between $1.80 and $1.90 versus a previous range of $1.83 and $1.93.
Well, now, what do we make of all this? It was a disappointing report, no question. But WD-40 has some decent brands in its portfolio, including the flagship lubricant, although its brand collection isn't necessarily on par with others, such as Procter & Gamble (NYSE: PG), Colgate-Palmolive (NYSE: CL), and Clorox (NYSE: CLX). WD-40 isn't the current best play in the consumer-goods department at the moment, in my humble opinion. Some will point out that the stock's yield is attractive right now at 3%, but its dividend history isn't as good as others in terms of quarterly hikes. I'm not very bullish on WD-40; maybe I will be at a later date.
Disclosure: I don't own shares in any of the companies mentioned; positions can change at any time.
With the markets still in a choppy/consolidation mode (or perhaps worse), it's best to consider including a few defensive stocks in your portfolio, and with the aforementioned in mind Colgate-Palmolive is worth an evaluation.
Colgate-Palmolive Company (NYSE: CL)'s restructuring is working, and its 2008/2009 results will continue to show it. In late 2004 CL initiated a 4-year cost reduction program including a 10% workforce reduction, new product roll-outs, an emphasis on larger-growth markets, and the more-savvy deployment of marketing resources.
The results to-date? The CL train is moving forward, with analysts generally seeing near-double-digit annual revenue growth through at least 2009, and probably longer. An eye-opening stat -- Colgate is an enhanced, global consumer products defensive play: 65% of CL's revenue stems from personal, oral, and home care sales outside North America.
By definition, no. Stocks carry risk. If you don't want risk, put your money in treasury bills or under the mattress. But don't expect much of a return, if any. Having said that, certain stocks do have attributes that make them relatively, and I emphasize this word, relatively, safer investments than others.
First and foremost, they have solid earnings. The best ones increase earnings every year for several years, no matter what the economy does. Examples: Coca-Cola Co. (NYSE: KO), Johnson and Johnson (NYSE: JNJ) Procter & Gamble Co. (NYSE: PG), Colgate-Palmolive Co. (NYSE: CL). If you've watched these stocks during the last 6 months, they've gone down but nowhere near the depths of most others. They have solid earnings investors can count on. Investors pay for that.
TheStreet.com's Jim Cramer this is one of the rare moments in time when every investor camp has reason to be pleased.
It's one of those moments where all camps are happy.
The camp that owns and buys defensive stocks got plenty of reports that indicate the defensive stocks are coping with raw costs. Whether it be Procter & Gamble (NYSE: PG) (Cramer's Take) with tremendous sourcing and leaner manufacturing, or Colgate (NYSE: CL) (Cramer's Take) making so much more money than we thought, the case can be made that what looked like an overstretched group on a price-to-earnings multiple may turn out to be worth a few more points of multiple expansion in a lowering interest-rate environment. (Either Coke (NYSE: KO) (Cramer's Take) or Pepsi (NYSE: PEP) (Cramer's Take) could kibosh that this week, but you got it in spades last week.) Given that we had weak data -- employment report -- signaling recession, the thesis had gravitas.
Those who bought the industrials were rewarded because international was so strong and because there is hope that domestic turn in housing could be at hand. The commercial construction numbers, while slowing, aren't slowing so hard that numbers are an issue.
TheStreet.com's Jim Cramer says this also-ran defensive stock keeps climbing, and that signals a recession.
Colgate Palmolive (NYSE: CL) (Cramer's Take) is menacing. That's right, its action is downright menacing, because it is one of my absolute favorites when I need an indicator of what the market is thinking.
And this stock's action is screaming "Recession." Can one stock be so important? Indeed, if anything, this is the "perfect" security, the also-ran to Procter & Gamble (NYSE: PG) (Cramer's Take) that, without a recession, would be too dicey and marginal to make a bet on.
While the factory's closing is not news to the remaining 115-200 employees still working there, according to Juanita Sneed, president of Local 15C of the United Food and Commercial Workers Union, many of the remaining employees are still "struggling with the finality" of the eventual closing. It will hit home particularly hard since the closing will fall so close to Christmas.
The company first announced plans of the closing back in October 2005 and now says that the final closing will take place in two to three weeks. The factory, at its peak in the 1960s, employed as many as 1,500 workers. Its recent hourly wage was around $22.
MOST NOTEWORTHY: Ariba, Meredith Corp and Time Warner Telecom were today's noteworthy initiations:
Montgomery initiated Ariba (NASDAQ: ARBA) with a Buy rating and $14 target and said ARBA's SaaS transition is essentially completed and that the benefits of higher cash flow, new sales hires, product releases, and new markets should be seen in FY08.
Jefferies resumed coverage of Meredith Corp (NYSE: MDP) with a Hold rating and $59-$61 target and expects ad growth to slow given the current economic backdrop.
Citigroup initiated Time Warner Telecom (NASDAQ: TWTC) with a Buy rating and $29 target. The named TWTC its top pick in the emerging telco sub-sector based on its differentiated niche position, strong fiber assets and sustainable revenue growth.
OTHER INITIATIONS:
JP Morgan started Arcelor Mittal (NYSE: MT) and Daktronics (NASDAQ: DAKT) with Overweight ratings.
Lehman started Transocean (NYSE: RIG) with an Overweight rating.
Bear Stearns initiated StatoilHydro (NYSE: STO) with an Outperform rating.
Credit Suisse initiated Colgate-Palmolive (NYSE: CL) with an Outperform rating and $87 target.
A look at 52-week highs often shows where the market is pointing for its leadership when it moves up, or safety when it sells off. A few notable companies that hit highs last week:
Priceline.com (NASDAQ: PCLN): Shares in the online travel company have almost tripled from their one-year low and now trade just shy of $110. Given the carnage in the airline industry, this may seem odd. But being an online middle man is very different from having to fuel the planes and maintain the hotels. The company's gross travel booking rose 54% in the third quarter, pushed by strength in its Europe business. Total revenue rose from $313 million in the quarter last year to $417 million this year. E-commerce can be a pretty good business, even if the industries the company serves are not doing well.
Charles Schwab Corp. (NASDAQ: SCHW): Financial services looks like a train wreck of an industry. But, with retail trading running strong, full-service and discount brokers are doing well, as long as they don't have assets in the mortgage-backed securities area. Schwab seems smart enough to have dodged that bullet. It hit a 52-week high of over $24 this last week. Daily trades by clients hit almost 319,000 in October, up 29% from the same month last year.
10 Best Stocks You Might Actually Buy You think you know what to buy to get the big returns? Think again. And don't think so hard. These are the top 10 "survivor" stocks of the original S&P 500, from inception until post-2000, as ranked by their average annual returns. They include Altria, Abbott Labs, Bristol-Meyers Squibb, Tootsie Roll Industries, Pfizer, Coca-Cola, Merck, PepsiCo, Colgate-Palmolive and Crane. The 10 Best Stocks You Might Actually Buy - Fool.com
The iPhone's Bumpy Ride Nearly five months have passed since Steve Jobs unleashed his flashy iPhone upon the world. No doubt the iPhone will improve as time goes on, but it has become apparent that the business of designing, selling, and supporting smartphones is a lot trickier than selling PCs, even for a company as gifted as Apple. Little gotchas seem to pop up at every turn. The iPhone's bumpy ride - FORTUNE
50 Great Places to Raise Kids Family-oriented neighborhoods with the most affordable homes and the best schools may be hiding in places you've never heard of. These are the 50 most kid-friendly small towns and suburbs in the U.S. -- where crime rates and cost of living are low, and schools, test scores, and cultural activities are better than most. Best Places to Raise Your Kids, 2007
$100 Fill-Up Coming to a Pump Near You With speculators running up the price of a barrel of oil to the $100 range, there can be little doubt that the average price of a gallon of regular gasoline is headed for $3.50, and maybe even $4, before there's any sort of fallback. Here's a list of some of the biggest budget busters on the market, including tank size and how much it costs to fill an empty tank at $3.50 a gallon. $100 fill-up coming to pump near you - Bankrate.com
This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and check out other Battle of the Brands posts.
Here are some highlights from this past week's 
Here are some highlights from this past week's 
Colgate-Palmolive
Consumers these days are so lacking in confidence that 
Kimberly-Clark
Ted Allrich is the founder of 
Over this past weekend, .gif){kind=logo}
How Washington can cut gas prices fast -- and why it won't
Oil prices and Fed policy: A solution is not as easy as it seems!
Cramer on BloggingStocks: AIG's foolishness puts cataclysm back on the table
