Oracle Corporation (ORCL), Colgate-Palmolive Company (CL): Three Great Stock Picks From Credit Suisse’s Focus List

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Boring is beautiful

Like Oracle, Colgate-Palmolive Company (NYSE:CL) has underperformed the broader market this year, but that’s about all these two businesses have in common. Unlike Oracle Corporation (NASDAQ:ORCL), this “Focus List” name is not a particularly sexy business. This company makes toothpaste, soap, deodorant, and other household items.
Colgate-Palmolive Company (NYSE:CL) is a different type of investment; it’s a “margin of safety” dividend stalwart. The stock is actually near a 52-week high and has done quite well. It only lags the market because it’s not a growth stock. The trade-off, naturally, is that businesses like Colgate-Palmolive Company (NYSE:CL) hold up better in tough times, and that’s why I like the stock here.
Let’s face it Fools, we’ve had a ridiculously wonderful rally in the stock market, but nothing goes up in a straight line forever. At some point the market will sell off, and that’s when this solid dividend payer will shine.
The dividend yield currently trades just above 2%, not particularly inspiring, because the stock has risen a good deal this year with the market. But that dividend has been paid, without a single interruption or any dividend cuts, since 1977. It was raised again this year and, considering that the company pays-out less than 50% of earnings in dividends, it’s due for another increase soon.
There are very few things I know to be true in this life; one of them is that you want to own Colgate-Palmolive Company (NYSE:CL) for safety and dividends. Should the market, or the economy, falter I will guarantee you that people will buy toothpaste and deodorant. And if things do great from here, then wonderful, the dividend payouts will keep going up as well.
It’s not sexy, it’s not a “get rich quick pick,” but truthfully it makes a lot of sense here.

Focus, focus, focus!

Does it make sense to “copy” Credit Suisse’s Focus List? The track record certainly would suggest so. But these stocks make sense on their own merits, because of their underlying fundamentals.

It certainly doesn’t hurt to have exclusive company though, and the Focus List is a great starting point to find some (potentially) great investments.

The article 3 Great Stock Picks From Credit Suisse’s Focus List originally appeared on Fool.com and is written by Adem Tahiri.

Adem Tahiri has no position in any stocks mentioned. The Motley Fool owns shares of Oracle. Adem is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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