Honestly, if you've looked at your brokerage account lately, you might have noticed that the big, reliable names in your "boring" bucket took a bit of a beating last year. Colgate Palmolive Co stock wasn't immune. In fact, 2025 was kind of a slog for the company. While the S&P 500 was busy chasing AI rallies, Colgate (NYSE: CL) shares actually dropped by about 12%.
It’s easy to write off a 200-year-old soap company when things get quiet. But if you’re looking for a turnaround story that doesn't involve a risky tech startup, this might be it. Analysts at major firms like Morgan Stanley and Piper Sandler are starting to call this their "top pick" for 2026.
Why? Because the "toothpaste king" is finally coming out of a nasty cycle of high inflation and weird post-pandemic consumer behavior.
What Really Happened With Colgate Palmolive Co Stock in 2025?
Most people think a company that sells toothpaste and dish soap is "recession-proof." That’s mostly true—people don't stop brushing their teeth just because the economy gets shaky—but 2025 threw some curveballs.
Last year, the company dealt with a "double whammy." First, they had to hike prices to keep up with rising costs. While that protected their margins for a while, it eventually caught up to them. In the third quarter of 2025, sales volumes actually fell by 1.9%. Basically, people started looking for cheaper alternatives or just buying less.
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Second, the U.S. consumer felt "stretched." We saw a rise in discount-seeking behavior. If you’ve been choosing the generic brand at Target lately, you’re part of the trend that gave Colgate’s executive team a headache.
The Numbers That Actually Matter
Despite the stock's sluggish 2025, the underlying engine is still humming. Look at these stats from the latest reports:
- Global Toothpaste Market Share: 41.2%. Yes, nearly half the world uses their paste.
- Manual Toothbrush Share: 32.4%.
- Dividend King Status: They’ve increased their dividend for 63 consecutive years.
- Current Yield: Around 2.4% to 2.6%, depending on the day's price.
Why 2026 Looks Like a Rebound Year
Markets are forward-looking, and right now, they are looking at "easy comparisons." Since 2025 was so meh, 2026 doesn't have a very high bar to clear.
Michael Lavery over at Piper Sandler recently upgraded the stock to "Overweight." He’s betting that the inflationary pressures that squeezed the company are finally cooling off. Plus, there’s the "Emerging Markets" factor. Colgate gets roughly 45% of its sales from places like Latin America and Asia. While the U.S. market is a bit stagnant, these regions are starting to show real signs of life.
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The $5 Billion "Vote of Confidence"
You shouldn't ignore the share buybacks. In early 2025, the board authorized a new $5 billion repurchase program. When a company buys back its own stock, it’s usually because they think the market is underpricing it. It also helps boost Earnings Per Share (EPS), which is a metric Wall Street loves to obsess over.
The Hill’s Pet Nutrition Factor
If you think Colgate is just about teeth, you’re missing a huge chunk of the value. Their Hill’s Pet Nutrition brand is a juggernaut. Even when people cut back on their own fancy snacks, they tend to keep buying the high-end "Science Diet" for their dogs and cats.
They recently exited the "private label" pet food business to focus entirely on their premium brands. It caused a tiny dip in short-term revenue, but it’s a smart move for long-term profit margins. Premium pet food is a high-margin business, and it’s one of the few categories where consumers are remarkably loyal.
Is It Time to Buy?
Kinda. It depends on what you're after.
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If you want a stock that’s going to double in three months, Colgate Palmolive Co stock is going to bore you to tears. But if you want a "Dividend King" that pays you to wait while the market stabilizes, it's looking very attractive at current valuations.
The stock has been trading at a P/E ratio around 23x. While that’s not "basement bargain" cheap, it’s historically reasonable for a company with this kind of moat. Morgan Stanley is currently targeting a price around $87-$88, which suggests a double-digit return when you factor in the dividends.
A Few Risks to Watch
It’s not all sunshine and minty-fresh breath.
- Tariffs: New trade policies could add about $200 million in costs to their supply chain.
- The "Buy Local" Movement: In places like Canada and India, there’s been a push for local brands, which hurts global giants.
- Private Label Growth: If the economy stays rough, the "Great Value" toothpaste might keep stealing a few percentage points of market share.
Actionable Insights for Investors
If you’re considering adding this to your portfolio, don't just jump in all at once.
- Watch the Q4 Earnings: The company is expected to be conservative with their 2026 guidance. If the stock dips on a "boring" outlook, that might be your entry point.
- Check the Dividend Dates: They typically pay quarterly in February, May, August, and November. The most recent ex-dividend date was January 21, 2026.
- Focus on Volume Growth: In the next few earnings calls, ignore the revenue growth for a second and look at "Volume." If people start buying more tubes of toothpaste again (instead of just paying higher prices for fewer tubes), the stock will likely take off.
The bottom line is that Colgate is a defensive play that’s currently on sale because of a mediocre 2025. For a long-term investor, those are usually the best times to look closer.
To get the most out of this investment, you should compare Colgate’s current yield against its main competitor, Procter & Gamble, to see which one offers a better "safety net" for your specific portfolio needs. You might also want to set a price alert for $80, which many analysts see as a "strong support" level where institutional buyers tend to step in.