Please ensure Javascript is enabled for purposes of website accessibility

Why Colgate-Palmolive Shares Jumped 7% Monday

By Daniel Miller - Updated Mar 2, 2020 at 5:47PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The broader markets bounced back, but here's why the consumer goods company is a savvy stock pick right now.

What happened

Shares of Colgate-Palmolive (CL 1.15%), a global consumer goods company selling products in over 200 countries, jumped more than 7% Monday as the markets attempted to stabilize after last week's sell-off.

So what

^DJI Chart

^DJI data by YCharts.

While sometimes stocks go up, and sometimes stocks go down, there's a little more to Colgate-Palmolive's pop today than a rising tide lifting all boats, with the broader markets surging following last week's sell-off. The Dow 30 and S&P 500 popped 5.1% and 4.6%, respectively, as some investors were likely able to brush off the uncertainty of COVID-19 impacts and buy stocks on their watch lists at a bit of a discount.

It's also fair to say that some investors probably scooped up defensive stocks such as Colgate-Palmolive, which owns a long list of brands that are entrenched in consumers' daily routines, since these stocks are more resilient to economic uncertainty or downturns. Another plus for investors looking for some semblance of safety is that Colgate-Palmolive offers a 2.55% dividend yield and has paid uninterrupted dividends since 1895. 

retail shelf aisle with consumer goods products

Image source: Getty Images.

Now what

There's little question global companies will feel some negative impact from COVID-19, it's just unclear how drastic the impact will be. If investors can keep a long-term view, Colgate-Palmolive remains an attractive stock due to its defensive nature, compelling brands, massive scale, and competitive advantages.

Furthermore, its recent fourth quarter showed a 5% increase in organic sales, pretty impressive for such a massive company. Investors would be wise to take stock market volatility with a grain of salt as the world waits to gauge the impacts from COVID-19 and other global economic developments.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Colgate-Palmolive Company Stock Quote
Colgate-Palmolive Company
CL
$79.79 (1.15%) $0.91

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
319%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/29/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.