Dividend Aristocrats to Profit From Everyday: Colgate-Palmolive Company (CL), PepsiCo, Inc. (PEP), The Coca-Cola Company (KO)

Its return on investment of 17.8% and profit margin of 18.9% are stronger than Pepsi’s, but Pepsi is better situated for growth with array of snacks and beverages. Coca-Cola’s yield of 2.9% is higher than the S&P 500’s yield and the firm’s well-known brands give it the strong moat a dividend aristocrat needs.

Household Products

Colgate-Palmolive Company (NYSE:CL) is not as famous as The Coca-Cola Company (NYSE:KO) or Pepsi, but it has a number of well-known brands in the oral care, personal care, home care, and pet care markets. The company continues to grow with new products like Colgate-Palmolive Company (NYSE:CL) Optical White that help income constrained consumers who are unable or unwilling to get a professional teeth whitening.

The company as a whole is very profitable with a return on investment of 37.0% and a profit margin of 15.4%. It operates in very competitive markets, but high fixed costs and heavy advertising requirements help to keep competitors out and returns up. One negative is the firm’s underfunded pension plan. Colgate-Palmolive Company (NYSE:CL)’s yield of 2.2% is very close to the average of the S&P 500. This company is not as attractive as the other aristocrats, but it is still a strong firm.

Conclusion

The dividend aristocrats are famous for their consistent and high quality dividend. Coca-Cola and Pepsi are two good buys with decades of brand equity and subsequent high barriers to entry. Colgate-Palmolive Company (NYSE:CL) is not as famous as its beverage based cousins, but it has a number of well-known brands in the personal care market. Colgate-Palmolive is the most expensive firm with the lowest yield. Regardless, it still has well developed brands that investors can profit from.

The article Dividend Aristocrats to Profit From Everyday originally appeared on Fool.com and is written by Joshua Bondy.

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