Matthews International (NASDAQ: MATW) and Colgate-Palmolive (NYSE:CL) are both non-cyclical consumer goods & services companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, dividends, analyst recommendations, risk, institutional ownership, earnings and valuation.
Matthews International pays an annual dividend of $0.76 per share and has a dividend yield of 1.4%. Colgate-Palmolive pays an annual dividend of $1.60 per share and has a dividend yield of 2.1%. Matthews International pays out 33.2% of its earnings in the form of a dividend. Colgate-Palmolive pays out 61.8% 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. Matthews International has increased its dividend for 54 consecutive years and Colgate-Palmolive has increased its dividend for 6 consecutive years.
Matthews International has a beta of 1.08, suggesting that its stock price is 8% more volatile than the S&P 500. Comparatively, Colgate-Palmolive has a beta of 0.8, suggesting that its stock price is 20% less volatile than the S&P 500.
Insider and Institutional Ownership
78.6% of Matthews International shares are held by institutional investors. Comparatively, 72.9% of Colgate-Palmolive shares are held by institutional investors. 3.8% of Matthews International shares are held by company insiders. Comparatively, 1.0% of Colgate-Palmolive shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
This table compares Matthews International and Colgate-Palmolive’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of recent ratings and recommmendations for Matthews International and Colgate-Palmolive, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Matthews International presently has a consensus target price of $83.50, indicating a potential upside of 57.70%. Colgate-Palmolive has a consensus target price of $75.86, indicating a potential downside of 1.36%. Given Matthews International’s stronger consensus rating and higher probable upside, research analysts plainly believe Matthews International is more favorable than Colgate-Palmolive.
Valuation and Earnings
This table compares Matthews International and Colgate-Palmolive’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Matthews International||$1.52 billion||1.13||$74.36 million||$2.29||23.12|
|Colgate-Palmolive||$15.20 billion||4.44||$2.44 billion||$2.59||29.69|
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.
Colgate-Palmolive beats Matthews International on 10 of the 17 factors compared between the two stocks.
Matthews International Company Profile
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.
Colgate-Palmolive Company Profile
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.
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