Recent Buy

I’m looking for companies that are fairly valued, have a decent dividend yield(3% to 6%) and have a fairly long history of paying dividends consistently for 10 years or more. However, there could be some cases for exceptionally good company or a strategic buy for a very long term.

I was not expecting to pull the buy trigger so soon, however, I bought following security in this month of Jan, 2015 in my DRIP Portfolio.

1) Colgate-Palmolive Co. (CL)

Colgate-Palmolive is one of the leading consumer products company in the world, founded in 1806 and headquartered in New York. This company has two major categories of products: Oral, Personal, Home Care and Pet Nutrition like Colgate Total, Max Fresh, Optic White, Sensitive Pro-Relief, Plax mouthwash, floss, Palmolive, Irish Spring, Lady Speed Stick, Shampoos, Conditioners and other pharmaceutical products for oral heath care professionals. CL has long history of paying dividend, 119 consecutive years and raised them over 50 years and therefore, a member of elite group of Dividend Aristocrat.

I’ve been eyeing CL since several years and most of the time, it has appeared to me fully or over-valued and did not purchase it. Finally, I decided to make it my long-term hold in my DRIP portfolio, where I can average down my prices in future. CL motto is to create Bright Smiles and hope it could bring growing dividend smiles to fellow shareholders 🙂

CL is trading at P/E ratio of 30.1 which is frankly quite high for my taste with a dividend yield of 2.10% and Market Cap of $62.52B. It traded at $71.20 at its 52 week high and currently at $68.60, over-valued in my opinion but, as I mentioned, I’m going to make it a strategic buy.

I bought CL at $68.98 and initiated 7.1 positions in this company. It will add $10.22 of passive income on an annual basis that I do not have to earn and work for. I consider it as a good addition to my Portfolio and in it for a long haul.

Full Disclosure: Long on CL.

What do you think about this buy? Do you consider it fairly or overvalued.

Thanks for reading.

16 thoughts on “Recent Buy

  1. I do like CL very much for any long term portfolio, and I have owned it for many, many years. I also would love to add to my holdings. That being said, I think you could have found better buys than CL at current price/valuation. Given the chance I would buy some CL too, just not at current levels. But, I guess looking out ten or twenty years even at current prices/valuation you should do OK. Thanks for sharing.

    1. Hi DivHut,

      Agreed. I could have found other companies at fairer value like PG, KMB, UL, CLX, PM, however, I wanted to make CL as a long term hold and looking 20 or 30 years this price would not even matter that much, as long as CL keeps growing.

      Thanks for stopping by!

  2. I think you purchase of CL was a good move if it fits into your personal investing strategy. I too am interested in CL, but I choose to buy more energy stocks given the sale going on in this sector. Best of luck in 2015.

    1. Hi DD,

      Yeah, Could not agree more. Energy stocks are probably the best buys in the town right now and getting better. I’ve been buying COP, CVX, RDS.B, XOM and BP since Nov and last month as well. Good luck to you for 2015!

      Thanks for stopping by!

  3. Finally a fellow DGI blogger who choose to own that great company. I own CL for a long time now and are pretty happy with the current result. Long time growth fits to my needs.

    1. Hi Lars,

      Good to hear that we are fellow shareholders with CL and we would be happy campers 🙂 It is a great company, no doubt about that. Appreciate your kind words and support.

      Thanks for stopping by!

  4. Hi, Passive Income Mavericks.
    I like the purchase of CL; however, I do not currently own the stock. I agree that there are probably better options right now, but I certainly can’t blame you for adding a high quality name to your portfolio. I’m sure you’ll be very happy you pulled trigger on it in five to ten years. Best wishes.

    Goosemann Jones
    Flight to Dividends Blog

    1. Hi Jones,

      Totally agree! As Buffet says, it is better to buy wonderful companies at fair price, rather than fair companies at wonderful price, I went ahead and added CL in my DRIP portfolio, where I expect to average down. Appreciate very much your kind wishes.

      Thanks for stopping by!

    1. Hi Heimdiv,

      Absolutely. CL is a great company and it should provide a stable supply of passive dividends and many times work as a bull-mark in recessionary time. However, I also like other CL’s competitors like PG, KMB, and UL. Do not blame you to look elsewhere, e.g, energy and commodities stocks are a great buy and myself added a lot last Nov and Dec 🙂

      Thanks for stopping by!

  5. As others wrote, I believe it’s a good move in a long-term strategy plan as better buys can be found lately, in my point of view. I have always liked this company though… who wouldn’t? 😉

    1. Hi DivGuy,

      Could not agree more. CL is a wonderful company and unfortunately, it remains fully valued most of the time. So, I had to bite it at some point but over long term, we should be fine with CL 🙂

      Thanks for stopping by!

  6. The only thing I don’t like about CL is the valuation. Otherwise it makes a fantastic investment. And if your holding period is decades, even the current overvaluation is not all that big a deal. I’ve considered picking up a few shares myself and lowering my cost basis over time, just as you’re doing.

    1. Hi DD,

      Agreed. CL is fully valued right now but CL almost always trade at higher valuations. This was my first purchase and whenever price is appropriate, will buy more. Also, I wanted to balance my portfolio to more blue chips companies, as I’d loaded on REITs and energy stocks last couple of months. True, over decades, even this full price would not matter and be some decimal points.

      Thanks for stopping by!

Leave a Reply