2 Dividend Kings, 1 Clear Winner: P&G vs. Colgate

2 Dividend Kings, 1 Clear Winner: P&G vs. Colgate

Chris Lange

Wed, September 2, 2026 at 8:21 PM GMT+3 5 min read

• CL +1.13%
• PG +1.12%

Quick Read

• P&G (PG) outgrades Colgate-Palmolive (CL) on yield, valuation, and coverage, delivering 2.93% versus Colgate's 2.33% at a cheaper 22x earnings.

• CFO Andre Schulten guided P&G to return $15 billion to shareholders in fiscal 2027, including $10 billion in dividends and $5 billion in buybacks.

• Colgate's 15% year-to-date rally has pushed its P/E to 35x, making investors pay a steep premium for a smaller, slower-growing dividend.

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Two of the market's most reliable dividend payers just cut checks to shareholders within days of each other. Procter & Gamble (NYSE:PG) paid $1.0885 per share on August 17, 2026, while Colgate-Palmolive (NYSE:CL) paid $0.53 per share on August 14, 2026. Both are Dividend Kings. Both operate in the same aisle at the grocery store. Only one grades higher on the metrics that matter right now.

Streak Length: A Narrow Win for P&G

P&G has raised its dividend for 70 consecutive years and paid dividends every year since 1890. Colgate is no slouch, with 63 consecutive years of annual increases. Both firms sit comfortably in the Dividend Aristocrat and Dividend King club, so streak length alone is a rounding error. What matters is what those dividends are worth today and how safely they are funded.

Yield and Recent Raises: P&G Delivers More Cash

P&G's forward annualized dividend now stands at $4.354 per share, translating to a yield of 2.93%. The company raised its quarterly payout from $1.0568 to $1.0885 earlier this year, a 3% bump that CFO Andre Schulten flagged on the fiscal 2026 call.

Colgate raised its quarterly dividend from $0.52 to $0.53 starting with the April 2026 ex-date, roughly a 2% increase. Its forward annualized payout is $2.12 per share, yielding 2.33%. On both raw yield and raise cadence, P&G edges ahead.

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Payout Coverage: Where the Grades Diverge

Coverage is where the scorecard tilts sharply in favor of P&G. The company earned $6.89 in fiscal 2026 core EPS against a forward dividend of $4.354. Free cash flow reached $15.835 billion, and management delivered 100% adjusted free cash flow productivity for the year. That's a well-covered dividend with room to grow.

Colgate's EPS profile is tighter than the competition. Trailing diluted EPS sits at $2.54 against a $2.12 forward dividend. That coverage cushion is thinner than P&G's, and Colgate trades at a trailing P/E of 35 versus P&G at 22. Investors are paying more per dollar of earnings at Colgate for a smaller yield.

Capital Return Firepower

P&G returned over $15 billion to shareholders in fiscal 2026, including over $10 billion in dividends and $5 billion in share repurchases. Management guided to a repeat performance in fiscal 2027. As Schulten put it: "We expect to pay over $10 billion in dividends and to repurchase approximately $5 billion in common stock, combined a plan to return $15 billion of cash to share owners in fiscal 27."

Colgate returned $1.4 billion to shareholders through the first half of 2026, with free cash flow up 18%. The absolute numbers are smaller, but so is the company: market cap sits near $71.5 billion versus P&G's $339.6 billion.

Price Action Complicates the Story

There is another story behind the scorecard, however. Colgate shares are up 15.51% year to date and 9.28% over the past year. P&G has managed just 4.26% year to date and is down 4.2% over the past year. Colgate's premium valuation reflects that momentum, but momentum can cut both ways when a dividend costs 35 times earnings to own.

Verdict: P&G Grades Higher on the Dividend Scorecard

P&G wins on yield, coverage, valuation, absolute capital return, and streak length. Colgate wins on recent price performance and a leaner operating footprint. For investors buying the dividend rather than the trade, P&G's 2.93% yield backed by $10 billion in planned fiscal 2027 payouts earns the higher grade. Colgate remains a quality holding, but at 35 times earnings, the market is charging a premium for a slower-growing distribution. Watch fiscal 2027 core EPS delivery at P&G, which management guided to $6.89 to $7.11, to see if the coverage cushion holds.

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