Fortifying Your Portfolio: The Unshakable Trio

In today's volatile market environment, investors are increasingly seeking stability and resilience in their portfolios. One strategy to achieve this is by investing in companies with a proven track record of consistent dividend growth and strong financial performance. Three companies that stand out in this regard are Colgate-Palmolive (CL.NYSE), Coca-Cola (KO.NYSE), and Procter & Gamble (PG.NYSE) – all of which have been rewarding shareholders for decades.

Colgate-Palmolive (CL.NYSE)
A Dividend Aristocrat with Global Reach

Covered in our past newsletter as well, Colgate-Palmolive is a consumer goods giant known for its iconic brands like Colgate toothpaste, Palmolive soap, and Speed Stick deodorant. The company has raised its dividend for an impressive 60 consecutive years, making it a Dividend Aristocrat. This commitment to rewarding shareholders is backed by Colgate's strong financial performance and global reach.

In Q2 2024, Colgate reported a net sales of $5.1 billion, marking a 5% increase year-over-year. The company maintains market leadership in oral care with a 41.5% global market share in toothpaste and 32.2% global market share in manual toothbrush year-to-date.

The reported earnings per share (EPS) of $0.91 has surpassed analysts’ expectations of $0.87 per share. Colgate has also raised its organic sales growth forecast to between 6-8% compared to the previous forecast of 5-7%.

Colgate's global presence and diverse product portfolio provide resilience against economic downturns and changing consumer trends. Its open innovation strategy, which includes partnerships with startups and accelerators like Plug and Play and 100+ Accelerator, further fuels its innovation pipeline.

Coca-Cola Company (KO.NYSE)
A Cash-Heavy Business with Global Brand Power

Coca-Cola is a true dividend aristocrat, having raised its dividend for over 60 consecutive years. The company's iconic brand and global presence have made it a household name, and its business model of licensing concentrate ensures cost-efficiency and widespread availability.

In the recent quarter, Coca-Cola reported net revenue of $12.36 billion, which grew by 3%, while organic revenue grew 15%, beating earning estimates and raised its full-year outlook. The company now expects organic revenue growth of 9-10%. As for EPS, it was reported $0.84 vs $0.81 expected.

Despite unit case volume grew globally, it had dipped in North America due to weak sales in away-from-home channels. CEO James Quincy’s strategy is to partner with food service customers to maker food & drink combo meals to boost demand.

Coca-Cola's resilience during times of high inflation and its shareholder-friendly policies make it an attractive investment option. Warren Buffett's long-standing investment in Coca-Cola further underscores the company's stability and reliability.

Procter & Gamble (PG.NYSE)
A Household Name with Consistent Dividend Growth

Procter & Gamble (PG) is a global household name, owning popular brands like Tide, Gillette, and Pampers. The company has paid dividends for over 100 years and has increased its dividend for 68 consecutive years, making it a Dividend King.

Despite inflationary pressures, P&G has managed to grow its business through strategic price hikes, showcasing its pricing power. In recent earning, P&G beat earning estimates but reported a weaker-than-expected results due to low demand in China. The company reported an EPS of $1.40 vs $1.37 expected. Organic sales in China slide 9%. However, in North America, market share is growing and volume in home market rose 4%. For fiscal year 2025, PG expects the core net EPS to be in the range of $6.91 - $7.05

Procter & Gamble's robust free cash flow generation and profit growth have enabled it to consistently reward shareholders. The company's dividend yield of 2.37% with a 5.88% 5-year dividend growth rate demonstrate its commitment to shareholder value. With shares trading around $169.17 as of the article date, P&G offers investors a stable and reliable income stream.

Conclusion

By investing in these three companies, investors can build a resilient portfolio with exposure to diverse sectors, including consumer goods, beverages, and household products. Their consistent dividend growth, strong financial performance, and global reach provide a solid foundation for long-term investment success.

However, it's important to note that past performance is not a guarantee of future results, and investors should carefully consider their investment goals, risk tolerance, and overall portfolio diversification when making investment decisions.

Hope you have found the above stocks useful 😃 

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Sources:
1. Dividend Growth: A Strategy For Building Resilient Portfolios. Available at: https://www.proshares.com/globalassets/proshares/pdfs/fund-marketing/proshares_dividend_growers_etfs.pdf
2. Building Healthier Futures Through Global Innovation. Available at: https://innovation.colgatepalmolive.com/articles/healthier-futures-through-global-innovation/
3. 3 Dividend Stocks That Have Been Keeping Shareholders Happy for 50 Years. Available at: https://investorplace.com/2024/06/3-dividend-stocks-that-have-been-keeping-shareholders-happy-for-50-years/
4. Coca-Cola and Other Dividend Kings That Have Raised Their Payouts for 60 Years or More. Available at: https://www.barrons.com/articles/coca-cola-jnj-procter-gamble-dividend-kings-stock-price-payouts-911747c0

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