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.