Colgate-Palmolive vs. Kraft Heinz: With the Market Turmoil, Which Stock Is a Better Buy?
With the recent market turmoil, investors may start looking more closely at defensive stocks like Colgate-Palmolive (NYSE:CL) and Kraft Heinz (NYSE:KHC).
Colgate-Palmolive dominates personal care categories like toothpaste, while Kraft Heinz focuses on massive scale within the packaged food industry. This comparison breaks down their latest performance and valuation to help you decide which belongs in your portfolio.
The case for Colgate-Palmolive
Colgate-Palmolive operates a diverse business model focused on oral care, personal care, home care, and pet nutrition. The company sells its products in more than 200 countries, reaching a vast global audience of consumers, dentists, and veterinarians. In its latest annual report, the company noted that Walmart (NASDAQ:WMT) and its affiliates accounted for approximately 11% of sales. Customer concentration like this adds a layer of risk to the business.
In FY 2025, revenue reached nearly $20.4 billion, which represented growth of approximately 1.4% compared to the prior year. The company reported net income of roughly $2.1 billion for the period. This resulted in a net margin of nearly 10.5%, indicating a decrease from the approximately 14.4% net margin recorded during the previous fiscal year.
The case for Kraft Heinz
Kraft Heinz is a global food and beverage giant producing items for at-home, restaurant, and on-the-go occasions. As a major player among food stocks, the company operates in multiple countries and relies on a mix of independent brokers and direct sales. In its latest annual report, the company noted that Walmart represented approximately 21% of net sales in FY 2025. Customer concentration like this adds a layer of risk to the business.
In FY 2025, revenue reached nearly $24.9 billion, a decrease of approximately 3.5% from the previous year. The company reported a net loss of nearly $5.8 billion for the fiscal period. This led to a net margin of roughly -23.4%, which was a significant shift from the positive net margin reported in the prior fiscal year.
Risk profile comparison
Colgate-Palmolive faces risks from its extensive international operations, where foreign currency fluctuations and geopolitical instability can impact financial results. The company competes in an intense global market against private labels and direct-to-consumer brands that challenge its pricing power. Additionally, the company must manage the ongoing financial uncertainty and potential costs related to talc-related litigation.
Kraft Heinz deals with intense competition in the food and beverage industry and the constant need to predict shifting consumer preferences. The company is managing substantial indebtedness and recently announced the divestiture of its North American coffee business, which competes with brands like J. M. Smucker (NYSE:SJM). It also faces potential risks from U.S. tax audit disputes and recent non-cash impairment charges on its intangible assets.
