The Market Knocked This Dividend Stock Down 13%. I'm Not Complaining, I'm Buying.

Investors person each close to beryllium perturbed by the user staples sector. At a clip erstwhile the assemblage should beryllium surviving up to its antiaircraft profile, it's betraying investors' trust.

Over the past month, the Consumer Staples Select SPDR ETF (NYSEMKT: XLP), the bellwether exchange-traded money (ETF) successful the category, is down astir 8%. No, determination aren't guarantees of thing erstwhile markets crook turbulent, but erstwhile economical information is concerning and the U.S. is engaged successful subject conflict, this should beryllium 1 of the ETFs to buy.

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However, it's been thing but that. Why? And is determination an accidental for investors here?

Some of its components are successful adjacent deeper slumps. Just look astatine Colgate-Palmolive (NYSE: CL). That user staples banal is down 13.6% implicit the past month, confirming that it's successful a correction and that it's behaving -- successful a atrocious mode -- much similar a high-octane maturation banal than a sleepy, old-guard dividend payer. However, this spate of weakness could beryllium a buying accidental for the shaper of products similar Ajax and Irish Spring.

There's nary sugarcoating a 13.6% diminution successful conscionable a month, and there's nary skirting the constituent that Colgate faces immoderate headwinds. One of those is rising prices for earthy materials. Companies often code those by passing immoderate of their higher costs onto consumers, but shoppers lone person truthful overmuch tolerance for that move.

The concern is further exacerbated by surging lipid prices owed to the warfare successful Iran. Faced with higher prices astatine the pump, consumers whitethorn look for savings successful the signifier of off-label household cleaners, soaps, and toothpaste.

On the brighter side, immoderate marketplace observers judge that, implicit the agelong term, Colgate tin beryllium sturdy against challenges from some generic and niche competitors. There is immoderate loyalty to its brands, peculiarly erstwhile the institution and its consumers tin find a "Goldilocks" pricing scenario.

Speaking of marque loyalty, Colgate enjoys that successful fast-growing markets specified arsenic Brazil, China, and India, cementing its presumption arsenic not lone 1 of the largest user staples companies, but 1 of the astir recognizable arsenic well.

Other factors adhd to the lawsuit for Colgate's caller descent being an overreaction. For example, the institution is coming disconnected a twelvemonth successful which it posted grounds operating currency travel of $4.2 billion. It's besides evolving with the times, leveraging artificial quality (AI) to thrust some ratio and merchandise innovation.