Colgate-Palmolive (NYSE: CL) and Matthews International (NASDAQ:MATW) are both non-cyclical consumer goods & services companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, risk, profitability, valuation, earnings and dividends.

Volatility & Risk

Colgate-Palmolive has a beta of 0.81, indicating that its share price is 19% less volatile than the S&P 500. Comparatively, Matthews International has a beta of 1.08, indicating that its share price is 8% more volatile than the S&P 500.

Dividends

Colgate-Palmolive pays an annual dividend of $1.60 per share and has a dividend yield of 2.1%. Matthews International pays an annual dividend of $0.76 per share and has a dividend yield of 1.4%. Colgate-Palmolive pays out 61.8% of its earnings in the form of a dividend. Matthews International pays out 33.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Colgate-Palmolive has increased its dividend for 5 consecutive years and Matthews International has increased its dividend for 53 consecutive years.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Colgate-Palmolive and Matthews International, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Colgate-Palmolive 1 11 5 0 2.24
Matthews International 0 0 3 0 3.00

Colgate-Palmolive presently has a consensus target price of $75.86, indicating a potential upside of 0.70%. Matthews International has a consensus target price of $83.50, indicating a potential upside of 55.06%. Given Matthews International’s stronger consensus rating and higher possible upside, analysts plainly believe Matthews International is more favorable than Colgate-Palmolive.

Earnings and Valuation

This table compares Colgate-Palmolive and Matthews International’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Colgate-Palmolive $15.20 billion 4.35 $2.44 billion $2.59 29.08
Matthews International $1.52 billion 1.14 $74.36 million $2.25 23.93

Colgate-Palmolive has higher revenue and earnings than Matthews International. Matthews International is trading at a lower price-to-earnings ratio than Colgate-Palmolive, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Colgate-Palmolive and Matthews International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Colgate-Palmolive 15.10% 2,782.56% 20.45%
Matthews International 4.83% 15.77% 5.30%

Institutional and Insider Ownership

72.8% of Colgate-Palmolive shares are held by institutional investors. Comparatively, 78.6% of Matthews International shares are held by institutional investors. 1.0% of Colgate-Palmolive shares are held by insiders. Comparatively, 3.9% of Matthews International shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Colgate-Palmolive beats Matthews International on 10 of the 17 factors compared between the two stocks.

About Colgate-Palmolive

Colgate-Palmolive Company (Colgate) is a consumer products company. The Company operates in two product segments: Oral, Personal and Home Care, and Pet Nutrition. The Oral, Personal and Home Care product segment is operated through five geographic segments, which include North America, Latin America, Europe, Asia Pacific and Africa/Eurasia. The Company’s oral care products include Colgate Total, Colgate Sensitive Pro-Relief, Colgate Max Fresh and Colgate Optic White. The Company is also engaged in various product categories of the personal care market with operations in liquid hand soap, which it sells under the Palmolive, Protex and Softsoap brands. The Company manufactures and markets a range of products for the home care market, including Palmolive and Ajax dishwashing liquids, Fabuloso and Ajax household cleaners and Murphy’s Oil Soap. The Company, through its Hill’s Pet Nutrition segment (Hill’s), manufactures pet nutrition products for dogs and cats.

About Matthews International

Matthews International Corporation is a provider of brand solutions, memorialization products and industrial technologies. The Company operates through three segments: SGK Brand Solutions, Memorialization and Industrial Technologies. The SGK Brand Solutions segment provides brand development, deployment and delivery (consisting of brand management, printing plates and cylinders, pre-media services and imaging services for consumer packaged goods and retail customers, merchandising display systems, and marketing and design services). The Memorialization segment manufactures and markets a line of memorialization products used primarily in cemeteries, funeral homes and crematories. The Industrial Technologies segment designs, manufactures and distributes a range of marking, coding and industrial automation solutions, order fulfillment systems and related consumables.

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