Colgate-Palmolive
The company, which produces Softsoap, Tom's of Maine, and other products, hauled in $4.08 billion in sales during the fourth quarter. Compared with the year-ago quarter, that's an 11.5% gain, supported by particularly strong volume growth of 3%.
Record-level earnings per share reached $1.21, representing 21% year-over-year growth (and that's when adding back a $0.06 restructuring charge in the fourth quarter of 2008).
Notably, these impressive growth rates don't come courtesy of easy comparisons -- in 2008's final quarter, sales, volumes, and EPS were all positive. Said differently, Colgate-Palmolive's fine quarterly showing demonstrates strength on an absolute basis, not just a bounce off a low base.
All things considered, full-year performance also shone. Revenue in 2009 was even with the previous year, at $15.3 billion, while volume climbed 0.5%. Currency headwinds completely offset price increases -- 75% of sales are international, and we no doubt all remember last year's flight to the dollar. Meanwhile, EPS of $4.37 advanced 13% compared with 2008's adjusted results.
There is, however, a blemish to consider. In June of last year, I expressed concern that sales of Colgate-Palmolive's premium-priced Hill's pet foods may suffer in the future, and that's exactly what happened. Fourth-quarter Hill's volume sunk 8.5%. Explaining the disappointing results, management cited recessionary trends that didn't mix well with a series of 2008-09 price increases. Ultimately, price gaps between Hill's and competing products -- which include Procter & Gamble's
Getting back to decidedly good news, management told conference-call listeners that a big jump in operating cash flow bodes well for "increased dividends and stock repurchases." More of a growth than an income stock, in my opinion, I don't believe Colgate-Palmolive will boast the 3%-plus yield of a Clorox
On that note, management is upbeat that it can turn in yet another year of double-digit EPS growth. Down from a recent foray into the mid-$80s, shares currently trade at $80 and change, representing a forward P/E of 15.1. For comparison, the stock's five-year average P/E is 22.8.
Going forward, I wouldn't assume that management can match its trailing five-year EPS growth rate of 13%. But I wouldn't be surprised to see the company pull it off, either. All told, today's prices likely offer a good buying opportunity. Another trip down to the $70s, however, would be a chance to really load up the cart.
For related Foolishness: