Imagine that, eight years ago, you had the intelligent thought: “Colgate-Palmolive is an excellent company that is worth buying anytime I can get an earnings yield of 5% or better because I like my odds when I own a company that grows profits 8-11% annually, pays out a dividend around 2.5%, and has such high profit quality that the dividend has been able to grow during every year since 1963. Plus, things like dish soap, toothbrushes and toothpaste, and household cleaning products will be around for a long time and Colgate-Palmolive owns a lot of products in those categories that people gravitate towards almost subconsciously.”
In the 1980s and 1990s, one of the reasons why it was enjoyable to be a long-term shareholder of Coca-Cola stock is that the soda giant was able to grow volumes while simultaneously raising the prices of its drinks. Since around 2005 or so, Coca-Cola has struggled more so to grow volumes at the same time the company decided to raise prices—the company has resorted to holding prices steady or instituting temporary price hikes coupled with reductions (e.g. raise $1.25 soda to $1.50 then back to $1.25 so the $1.25 seems cheaper and the eventual $1.50 seems less lofty because it’s an already reached high).