There’s no doubt that the stock market has been tough over the past year. All three indicies – the Dow, the NASDAQ, and the S&P are all down over 30%. In an economic downturn, there are some safe havens, however. Think of companies that produce products that are necessary for everyday life: consumer staples, utilities, healthcare And with it now appearing that the economy is going to bump along in the doldrums for at least another year, it’s a good idea to remain defensive.
With that in mind, I’ve been looking closely at a company that:
- Focuses on oral healthcare and has a market share of close to 44%
- Has a history of steadily increasing dividends
- Is projected to continue growing, even with the prospects of a softened economy
- Has handily outperformed the indicies by approximately 20%
The company? Colgate Palmolive (CL). The investment thesis is fairly simple: Even in a bad economy, people still have to brush their teeth; and when they do, they tend to gravitate toward name-brand products. At its current price of about $65 per share, CL is undervalued by about 20%. And until the stock market recovers, you can enjoy its dividend yield of about 2.5%.
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