CL
Colgate-Palmolive Company
Consumer Defensive · Household & Personal Products · United States · Stock
Score Breakdown
Scored for Dividend Income profile
Sub-scores are 0–20 each; Model Score is weighted by your selected investment goal. How it works →
Why Ranked Here
- The composite score of 43.1/100 reflects a company with genuine profitability strengths — 16.2% operating margin and 13.1% ROA — that are significantly offset by a steep 26.2% net income decline and highly volatile quarterly earnings.
- The dividend factor was tempered by an 85.5% payout ratio and a year-over-year decline in dividends per share from $2.48 to $2.08, reducing the income appeal that typically supports consumer staples valuations.
- The absence of any active macro theme assignment means the model awarded no theme-related score credit, further limiting the total composite score.
Why Not Higher
- Bottom-line contraction of 26.2% in net income and a net loss quarter in 2025Q4 heavily penalized the growth and momentum factors, preventing the solid profitability ratios from lifting the overall score.
- The very high dividend payout ratio of 85.5% and the decline in dividends per share signal constrained financial flexibility, and the lack of any macro theme alignment removed an additional potential source of score credit.
Data Confidence
10 / 10
Very High — full data coverage
Why This Score
Grounded in figures from this company's SEC EDGAR filings — not a restatement of the score itself.
Revenue grew modestly from FY2024 to FY2025, rising from $20,101,000,000 to $20,382,000,000 (+1.4%), but net income fell sharply from $2,889,000,000 in FY2024 to $2,132,000,000 in FY2025 (-26.2%), and diluted EPS declined from $3.51 in FY2024 to $2.63 in FY2025 (-25.1%).
The model penalized the score heavily because bottom-line contraction far outweighed the modest top-line gain; a near-flat revenue increase paired with a steep earnings decline signals deteriorating growth quality.
In FY2025, Colgate-Palmolive posted an operating margin of 16.2%, a net margin of 10.5%, and a return on assets of 13.1%.
The model rewarded these solid margin and return figures, reflecting the company's ability to convert revenue into operating and net income efficiently and to generate meaningful returns on its asset base.
Filing evidence currently available does not support a more specific explanation for this factor.
Revenue showed a steady upward trend across the last four quarters, rising from $5,110,000,000 in 2025Q2 to $5,324,000,000 in 2026Q1. However, net income and operating income were highly uneven, with net income swinging to -$36,000,000 in 2025Q4 before recovering to $646,000,000 in 2026Q1, and operating income collapsing to $91,000,000 in 2025Q4 before rebounding to $964,000,000 in 2026Q1.
The model reflected the mixed signal of improving revenue momentum offset by a severe and volatile earnings disruption in 2025Q4, which tempered the overall momentum score despite the subsequent partial recovery.
Colgate-Palmolive's dividend payout ratio in FY2025 stood at 85.5%, and dividends per share have moved from $1.86 in FY2022 to $1.91 in FY2023, $2.48 in FY2024, and $2.08 in FY2025.
The model recognized the company's consistent dividend payment history but was tempered by the very high payout ratio of 85.5% in FY2025 and the decline in dividends per share from $2.48 in FY2024 to $2.08 in FY2025, which together suggest limited headroom for dividend growth and reduced income reliability.
Colgate-Palmolive is not currently assigned to any of the 24 tracked macro themes.
Because the security carries no active theme assignment, it did not receive theme-related score credit under the model's current methodology; this reflects the model's classification state and should not be read as a commentary on the company's business quality.
Research Summary
AI-generated analysis reflects data and conditions as of the report date shown above. Verify any specific figures through primary sources before acting on this analysis.
Colgate-Palmolive posted modest revenue growth of 1.4% in FY2025, reaching $20,382,000,000, but net income fell sharply by 26.2% to $2,132,000,000, signaling deteriorating earnings quality despite solid operating margins of 16.2% and a return on assets of 13.1%. Quarterly momentum shows steady revenue improvement but severe earnings volatility, including a net loss of $36,000,000 in 2025Q4 followed by a partial recovery in 2026Q1. The dividend payout ratio of 85.5% in FY2025, combined with a decline in dividends per share from $2.48 in FY2024 to $2.08 in FY2025, limits income reliability and growth headroom. Overall, the company presents a mixed profile of durable profitability metrics offset by meaningful earnings instability and constrained financial flexibility.
Plain English
Colgate-Palmolive is a well-known consumer goods company that barely grew its sales last year but saw its profits drop sharply, and while it still pays dividends, those payments actually shrank and are eating up most of its earnings, making this a stock worth watching carefully rather than acting on right now.
Bull Case vs. Bear Case
Bull Case
- Colgate-Palmolive maintains solid profitability fundamentals, with a 16.2% operating margin, 10.5% net margin, and 13.1% return on assets in FY2025, demonstrating efficient conversion of revenue into earnings.
- Quarterly revenue has trended consistently upward over the last four quarters, rising from $5,110,000,000 in 2025Q2 to $5,324,000,000 in 2026Q1, suggesting underlying demand resilience.
- The company has a long history of paying dividends, with per-share payments rising from $1.86 in FY2022 through FY2024, reflecting a commitment to returning capital to shareholders.
Bear Case
- Net income collapsed 26.2% year-over-year from $2,889,000,000 in FY2024 to $2,132,000,000 in FY2025, and diluted EPS fell 25.1% from $3.51 to $2.63, far outpacing the modest 1.4% revenue gain.
- Earnings were highly volatile on a quarterly basis, with net income swinging to a loss of $36,000,000 in 2025Q4 and operating income collapsing to just $91,000,000 that same quarter, raising concerns about earnings stability.
- The dividend payout ratio reached 85.5% in FY2025 and dividends per share declined from $2.48 in FY2024 to $2.08 in FY2025, indicating limited room for dividend growth and reduced income reliability.
What Could Change the Picture
Bullish Triggers
- A sustained recovery in quarterly net income and operating income above the 2025Q4 trough, with operating income returning toward the $1,000,000,000+ quarterly range seen in 2025Q2 and 2025Q3, would signal restored earnings stability.
- A meaningful reduction in the dividend payout ratio from its current 85.5% level, driven by net income growth rather than dividend cuts, would improve financial flexibility and income reliability.
Bearish Triggers
- If quarterly revenue momentum stalls or reverses from its current upward trend of $5,110,000,000 to $5,324,000,000 over the last four quarters, it would remove one of the few positive signals in the current profile.
- A further decline in dividends per share below the $2.08 recorded in FY2025, or another quarter of net losses similar to 2025Q4, would materially worsen the investment case.
Risk Profile
Medium RiskEarnings volatility poses a meaningful near-term risk, as net income swung to a loss of $36,000,000 in 2025Q4 and operating income fell to just $91,000,000 that quarter before partially recovering in 2026Q1. This instability, combined with limited detail available on the balance sheet beyond total assets of $16,330,000,000, supports a Medium risk rating and a Monitor Only label.
This report is for educational and research purposes only. It does not constitute financial, investment, legal, or tax advice — always conduct your own due diligence before making investment decisions.