Why Colgate-Palmolive Remains an Overlooked Dividend King

Colgate-Palmolive (NYSE:CL) is frequently neglected among dividend stocks, despite having a notable history of dividend increases. Known as a Dividend King, Colgate has augmented its dividend for 63 consecutive years, with payments since 1895. This is due to the company's lack of rapid growth and moderate dividend yield. However, its strengths lie in its durable consumer business, well-known brands, and long track record of returning cash to shareholders.

In 2026, Colgate increased its quarterly dividend to $0.53 per share, resulting in an annualized payout of $2.12 per share. The key is that Colgate has maintained this record for over six decades, solidifying its status as a Dividend King. With brands like toothpaste, toothbrushes, personal care products, and pet food, Colgate enjoys consistent demand even when consumers tighten their budgets.

Its 41.3% global toothpaste market share and 32.7% share of manual toothbrushes underscore this stability. In the second quarter of 2026, Colgate's net sales rose 4.9% to $5.36 billion, organic sales grew 2.4%, and base business earnings per share increased 8% to $0.99. While GAAP earnings per share dipped 5% to $0.86, base business earnings were positive.

Cash flow was robust, generating $1.74 billion in operating cash flow and $1.48 billion in free cash flow after capital expenditures, surpassing dividend payments. Colgate's steady cash flow ensures its ability to sustain the dividend. However, the lack of headline-worthy growth or high yield may deter investors focused on short-term income or rapid expansion.

Despite this, Colgate's mature business model offers advantages for income investors. Its sizable customer base and recurring demand provide stability, and the company remains committed to growth, expecting mid-single-digit EPS growth for 2026. While there are aspects to monitor, such as modest growth and declining North American sales, Colgate's history, improving cash flow, and commitment to dividends make it a compelling choice for investors prioritizing consistency over rapid growth.