Prices and figures as of the August 24, 2026 close: CL $92.55, SCHD $35.21.
The setup: an earnings number that doesn't match the cash
Colgate-Palmolive trades at roughly 36.7x trailing earnings. On the surface, that looks like a rich multiple for a slow-growth household-products company. Dig one layer down and the earnings figure itself is the problem — not the business behind it.
CL's FY2025 GAAP net income dropped to $2.13B from $2.89B the year before. That decline was driven by a Q4 2025 impairment of about $794M after tax (roughly $582M of it goodwill) written down against the Skin Health business, tied to weak category growth and underperformance particularly in China. It was a non-cash charge. No cash left the building.
The cash figures confirm it. Free cash flow rose to $3.63B in FY2025 from $3.55B in FY2024, and operating cash earnings (EBITDA) held essentially flat at roughly $4.87B versus about $4.85B a year earlier. That is the tension this piece works through: the earnings lens says the profit engine stumbled; the cash lens says it didn't.
What the one-year chart shows
The total-return chart above complicates any tidy "CL is the obvious cheap one" story, so let's be straight about it. Over the trailing year, SCHD decisively outran CL — roughly +30% total return for the ETF against roughly +12% for the stock, an approximately 18-point gap. CL has been the laggard, not the winner. The case built here rests on forward cash economics, not recent relative performance — and the picture makes that distinction unavoidable rather than optional.
The business: how Colgate actually makes money
Colgate-Palmolive sells everyday consumables across four areas: oral care (its flagship toothpaste and brush franchise), personal care, home care, and Hill's pet nutrition. It sits in the Consumer Defensive sector — Household & Personal Products. The appeal of this model is repeat purchase and pricing power on branded staples; the constraint is that unit volumes grow slowly and category demand is mature.
That maturity is exactly why the cash-versus-earnings question matters. A business like this rarely surprises on growth. It's supposed to convert steady sales into steady cash — so when reported earnings and cash flow diverge sharply, the cash side usually holds the more reliable signal.
Performance and yield figures are historical and may change. Total return includes price movement and distributions where available. Past performance does not guarantee future results. Yield is not the same as total return. This content is educational, not investment advice.
Financials & fundamentals
Here is the four-year trend. The point of laying it out is to separate a one-off year from a structural one — and the EBITDA line is the row that matters — operating cash earnings, which a non-cash charge leaves untouched.
| Fiscal year | Revenue | Gross margin | EBITDA | GAAP net income | Capex | Free cash flow |
| FY2025 | $20.38B | 60% | ~$4.87B | $2.13B | $564M | $3.63B |
| FY2024 | $20.10B | 60% | ~$4.85B | $2.89B | $561M | $3.55B |
| FY2023 | $19.46B | 58% | ~$4.50B | $2.30B | $705M | $3.04B |
| FY2022 | $17.97B | 57% | ~$4.11B | $1.78B | $696M | $1.86B |
Revenue has climbed every year, from $17.97B to $20.38B. Gross margin has widened from 57% to 60%. Free cash flow has nearly doubled off the 2022 low. And EBITDA — operating cash earnings — compounded at high single digits for two years ($4.11B to $4.50B to $4.85B) before going flat in FY2025 (~$4.87B). That flat year is the single most important fact in the table: the FY2025 earnings drop shows up in GAAP net income but not in the cash the business generates. The charge was non-cash, and the multi-year series makes that concrete rather than asserted.
