Image source: Colgate-Palmolive.

Colgate-Palmolive (NYSE:CL) is one of the most reputable dividend stocks in the market, and for good reason. The company has paid uninterrupted dividends in each and every year since paying its first in 1895, and it has increased those dividends over the last 52 consecutive years.

Nevertheless, the past is only prologue to the future, and past performance does not guarantee future results. Is Colgate-Palmolive strong enough now to continue raising dividends in 2016?

A clean and shiny business
Colgate-Palmolive has a presence in several consumer staples categories, including pet nutrition, home care, and personal care. However, most of the company's sales and earnings come from its undisputed leadership position in the global oral care market. 

Management calculates that Colgate-Palmolive owns 44.7% of the global toothpaste market and 34.2% of the manual toothbrush market on a global scale. In mouthwashes, Colgate-Palmolive's market share reaches 40.9% of the worldwide market. The company has built a rock-solid brand reputation over the years, and it has consolidated strong relationships with dental care professionals around the planet. More than 47% of dentists recommend Colgate-Palmolive products, a crucial differentiating factor in the industry.

The company has done an amazing job at expanding internationally; Colgate-Palmolive does business in more than 200 countries and territories, and it generates over 80% of its revenue outside the United States. It's particularly strong in emerging markets, where it has developed a wide portfolio of products targeting consumers at all income levels. According to management estimates for 2015, Colgate-Palmolive owns over 50% of the toothpaste market in emerging markets.

Unfortunately, its exposure to emerging markets is dragging on its financial performance lately due to currency devaluations and economic instability in those corners of the world. On the other hand, it also means exceptional opportunities for growth in the long term. The global middle class is expected to expand from 1.8 billion people in 2009 to 4.9 billion in 2030, and most of this growth will be coming from emerging markets.

A top industry play on dividend growth
On the back of its solid brand reputation and leading presence in emerging markets, Colgate-Palmolive has proven its ability to deliver consistently growing profits through many economic scenarios over the years. 

Image source: Colgate-Palmolive.

Its dividends are quite sustainable from a financial point of view: The average forecast from Wall Street analysts is that the company will earn $2.95 per share during 2016. This means that at their current level, dividends would represent nearly 52% of earnings. 

That dividend payout ratio is comparatively low, the business offers compelling growth prospects, and management has a long-standing commitment to dividends, so everything indicates that investors in Colgate-Palmolive will be rewarded with higher dividends in 2016 and beyond.

Not only that, the company is a top industry play for dividend-growth investors. Competitors such as Procter & Gamble (NYSE:PG) and Unilever (NYSE:UL) are considerably bigger than Colgate-Palmolive, and they also offer higher dividend yields. Procter & Gamble yields 3.5% at the moment and Unilever's dividend yield is currently in the area of 3.4% -- both substantially above Colgate-Palmolive's dividend yield of 2.4%.

However, Colgate-Palmolive has materially outperformed Procter & Gamble and Unilever in terms of dividend growth over the past five years, and the company will probably continue beating its bigger competitors in this area. 

CL Dividend Chart

CL Dividend data by YCharts.

Procter & Gamble has a dividend payout ratio around 70% of earnings forecasts for the year ending in June 2016, while Unilever's dividend payout ratio is in the neighborhood of 65%. Both companies have sound and sustainable dividend policies, but Colgate-Palmolive has more flexibility than they do to continue raising dividends at a faster rate.

Statistical studies have proven that companies delivering strong dividend growth tend to outperform the market in the long term, and Colgate-Palmolive looks well-positioned to make investors smile with growing dividends for years to come.