Buy, Sell, or Hold Colgate-Palmolive Stock?

Colgate-Palmolive stock (NYSE: CL) is down 12% this year, underperforming the S&P 500, which has gained 13%. This decline is largely due to several factors, including slowing sales growth, with the company forecasting only around 2% organic sales growth for 2025. Additionally, soft demand in its pet care business and negative foreign exchange impacts have been weighing on performance.

Given this context, a key question for investors is whether CL stock is a good buy at its current price of around $80 or if it should be avoided.

We believe that CL is a good buy at its current levels. Our conclusion is based on a comprehensive analysis comparing the stock’s current valuation with the company’s recent operating performance and financial health. Our assessment of Colgate-Palmolive on key parameters—Growth, Profitability, Financial Stability, and Downturn Resilience—shows that the company has a moderate operating performance and financial condition. While this performance is not outstanding, the stock’s valuation is also moderate, suggesting there is room for potential growth.

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How Does Colgate-Palmolive’s Valuation Look vs. The S&P 500?

Going by what you pay per dollar of sales or profit, CL stock is currently valued in line with the broader market.

• Colgate-Palmolive has a price-to-sales (P/S) ratio of 3.2 vs. a figure of 3.3 for the S&P 500
• Additionally, the company’s price-to-free cash flow (P/FCF) ratio is 19.1 compared to 21.2 for S&P 500
• And, it has a price-to-earnings (P/E) ratio of 22.2 vs. the benchmark’s 23.7

How Have Colgate-Palmolive’s Revenues Grown Over Recent Years?

Colgate-Palmolive’s Revenues have fallen over recent years.

• Colgate-Palmolive has seen its top line grow at an average rate of 4.2% over the last 3 years (vs. increase of 5.3% for S&P 500)
• Its revenues have grown 0.1% from $20 Bil to $20 Bil in the last 12 months (vs. growth of 5.1% for S&P 500)
• Also, its quarterly revenues grew 1.0% to $5.1 Bil in the most recent quarter from $5.1 Bil a year ago (vs. 6.1% improvement for S&P 500)

How Profitable Is Colgate-Palmolive?

Colgate-Palmolive’s profit margins are around the median level for companies in the Trefis coverage universe.

• Colgate-Palmolive’s Operating Income over the last four quarters was $4.3 Bil, which represents a high Operating Margin of 21.7% (vs. 18.6% for S&P 500)
• Colgate-Palmolive’s Operating Cash Flow (OCF) over this period was $3.9 Bil, pointing to a moderate OCF Margin of 19.6% (vs. 20.3% for S&P 500)
• For the last four-quarter period, Colgate-Palmolive’s Net Income was $2.9 Bil – indicating a moderate Net Income Margin of 14.5% (vs. 12.7% for S&P 500)

Does Colgate-Palmolive Look Financially Stable?

Colgate-Palmolive’s balance sheet looks strong.

• Colgate-Palmolive’s Debt figure was $8.8 Bil at the end of the most recent quarter, while its market capitalization is $64 Bil (as of 9/22/2025). This implies a very strong Debt-to-Equity Ratio of 13.6% (vs. 21.1% for S&P 500). [Note: A low Debt-to-Equity Ratio is desirable]
• Cash (including cash equivalents) makes up $1.2 Bil of the $17 Bil in Total Assets for Colgate-Palmolive.  This yields a moderate Cash-to-Assets Ratio of 7.0% (vs. 7.0% for S&P 500)

How Resilient Is CL Stock During A Downturn?

CL stock has been more resilient than the benchmark S&P 500 index during some of the recent downturns. Worried about the impact of a market crash on CL stock? Our dashboard CL Dropped 5.7% In A Month. Have You Fully Evaluated The Risk? has a detailed analysis of how the stock performed during and after previous market crashes.

Inflation Shock (2022)

• CL stock fell 19.8% from a high of $85.34 on 31 December 2021 to $68.48 on 10 October 2022, vs. a peak-to-trough decline of 25.4% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 1 February 2024
• Since then, the stock has increased to a high of $108.77 on 4 September 2024 and currently trades at around $79

COVID-19 Pandemic (2020)

• CL stock fell 22.6% from a high of $77.35 on 10 February 2020 to $59.89 on 25 March 2020, vs. a peak-to-trough decline of 33.9% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 18 August 2020

Global Financial Crisis (2008)

• CL stock fell 31.5% from a high of $39.99 on 12 September 2008 to $27.39 on 27 October 2008, vs. a peak-to-trough decline of 56.8% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 9 November 2009

Putting All The Pieces Together: What It Means For CL Stock

In summary, Colgate-Palmolive’s performance across the parameters detailed above are as follows:

• Growth: Weak
• Profitability: Moderate
• Financial Stability: Strong
• Downturn Resilience: Strong
• Overall: Moderate

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The Bottom Line

Overall, Colgate-Palmolive shows moderate performance across key metrics. The company’s valuation is also in a moderate range, with its current price-to-sales ratio of 3.4 times being slightly below its five-year average of 3.8 times. This indicates some potential upside.

One of the factors that has been hurting the company lately, a slowdown in its pet business, was largely due to a post-COVID inventory correction after a major surge in pet adoptions. This part of the business is expected to regain momentum in 2026, which should help boost Colgate-Palmolive’s overall growth.

However, we could be wrong in our assessment and there is a risk that investors may remain unwilling to pay a higher multiple for a company with slow sales growth. Therefore, investors should carefully consider the associated risks before buying CL stock.

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