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Tickers in this Article: CL, CLX, UL, AVP
Consumer goods giant Colgate-Palmolive (NYSE: CL) can be counted on for steady results in any economic climate. A stock performance chart on the company's investor relations website illustrates the impressive extent to which Colgate has benefited investors over the past quarter century. And perhaps surprisingly, it is handily outperforming many peers. IN PICTURES: Digging Out Of Debt In 8 Steps

Quarterly Review
Total reported company sales fell 5.5% to $3.8 billion as a 7.5% pricing increase proved insufficient in offsetting a volume decrease of 1.5% and a negative 11.5% impact from adverse currency fluctuations. The only geographic segment to report positive growth was North America, though on an organic growth basis only the Europe/South Pacific segment experienced negative growth. Notable organic growth came from Latin America (up 16.5%) while total company organic growth came in at 6%.

Colgate's flagship oral, personal and home care products segment, which includes the namesake toothpaste brand, Palmolive dishwashing detergent and Irish Spring soap, accounted for 86% of quarterly sales. The flagship category reported negative 6% sales growth as a double-digit negative foreign exchange translation offset 0.5% volume growth and 7% higher pricing.

The other product category is Hill's Science Diet pet food. Hill's reported a 3% sales decline as a 12.5% pricing increase was nearly completely offset by an 11.5% drop in volume. Negative currency impacts took care of the rest of the decrease.

Despite the mixed bag of reported sales trends, operating profit growth was steady in both product segments. The consumer brand segment posted an 8% increase while pet nutrition logged a 7% improvement. Excluding restructuring charges, Colgate reported that total operating profit grew 7% to $887.1 million as gross margins improved and SG&A expenses decreased to 34.6% of sales. The end result was a 7% increase in net income. Share buybacks boosted bottom-line growth to 9% as earnings came in at $1.07 per diluted share.

Operating Cash Flow Improved Significantly
Better yet, operating cash flow improved 17% to $1.2 billion as working capital efficiency improved from strong inventory controls and accounts receivables management. Minimal capital expenditure levels mean that Colgate can be counted on for solid free cash flow generation. Management also said it was comfortable with analyst earnings estimates for the full year, or $4.26 per share.

Given the current share price, that's a forward P/E multiple of 17. In other words, the stock is nowhere near the steal it was back in March and last fall when it fell below $60 per share. However, Colgate still has a decent dividend yield of 2.4% and can be relied on for steady sales and profit growth. So can its rivals, which Colgate considers to include Avon Products (NYSE: AVP), Clorox (NYSE: CLX) and Unilever (NYSE: UL).

Outperforming Peers In Last Quarter Century
However, returning to the total return chart on the company's investor relations website, Colgate's shares have outperformed its selected peer group by a wide margin. Over the past 25 years, Colgate is up 4815% while peers are up 2523%. Both have handily outperformed the market; the S&P 500 is up 961% over this time frame. The one-, three-, five- and 10-year charts tell a similar story: investors have cleaned up with Colgate over the years. (For further reading, check out A Guide To Consumer Staples.)

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