10 Best Household and Personal Care Stocks to Buy

3. Colgate-Palmolive Company (NYSE:CL)

Number of Hedge Fund Investors: 52

Colgate-Palmolive Company (NYSE:CL) is a company that produces and sells consumer goods. The segments that run it are Pet Nutrition, Oral, Personal, and Home Care. Products related to oral, personal, and home care include toothpaste, toothbrushes, mouthwash, bar and liquid hand soaps, shower gels, shampoos, conditioners, skin care products, dishwashing detergents, fabric conditioners, and household cleaners.

Over 40% of its total revenue comes from its branded oral care line. Sales outside of the country account for over 70% of its total revenue, with developing countries accounting for 45% of those sales.

While there are concerns regarding the security of consumers’ finances and ultimately their willingness to pay for the necessities in the company’s portfolio, the company is effectively managing the uncertain environment with caution. Under the direction of CEO Noel Wallace, CL has shifted its focus to spending more on R&D and marketing, i.e., on its core mix, in adjacent categories, and across the digital space, and responding more quickly to shifting consumer preferences. As a result, products are now on the market in less than six to twelve months, as opposed to the previous 18 to 36 months. Colgate’s long-term organic sales growth aim of 3%–5% has been met or exceeded for 22 consecutive quarters, proving the validity of this approach.

The company has spent an average of more than 12% of sales on marketing over the last four years, which is 120 basis points more than what was allotted in 2017–19. These results are attributed to increased brand spending and a renewed emphasis on consumer-valued innovation, even when it implies a higher cost.

ClearBridge Investments mentioned Colgate-Palmolive Company (NYSE:CL) in its Q2 2024 investor letter. Here is what the firm said:

“Colgate-Palmolive, added to the portfolio in 2023, started outperforming materially toward the tail end of last year as growth, margin and market share momentum began to turn favorably, and that momentum has continued year to date as the stock has nicely outperformed the large cap staples group. The fundamental upside has been driven by a combination of healthy organic growth (with positive volumes), good gross margin progression, and strong re-investment spending supporting market share gains and future growth.”

Jean-Marie Eveillard’s First Eagle Investment Management is the largest shareholder in the company, with 9,025,827 shares worth $875.87 million.