Celsius vs. Colgate-Palmolive: Which Stock Should Investors Consider Before the Start of 2027?

Are you looking for explosive growth or steady dividends? Investors choosing between Celsius (NASDAQ:CELH) and Colgate-Palmolive (NYSE:CL) must weigh the revenue potential of the beverage market against the stability of household essential products.

Celsius focuses on the fast-growing functional energy drink market, while Colgate-Palmolive dominates global oral and personal care. These companies represent two very different approaches to consumer goods, offering a choice between a disruptive challenger and a reliable industry titan.

The case for Celsius

Celsius focuses on the beverage category, marketing functional energy drinks to health-conscious consumers. It relies heavily on a distribution partnership with Pepsi, which provides access to vast retail networks and massive scale. Customer concentration like this adds a layer of risk to the business, as sales to this partner accounted for nearly 43.2% of total net revenue as of December 31, 2025. The company also utilizes various independent distributors and e-commerce platforms like Amazon (NASDAQ:AMZN) and Shopify (NASDAQ:SHOP) to reach its digital audience.

In its latest annual report, filed for FY 2025, revenue reached nearly $2.5 billion, representing a significant 85.5% increase compared to the previous year. While the top line grew rapidly, the company reported net income of approximately $108 million. This marked a decrease from previous years, reflecting the costs associated with its aggressive expansion and the complex integration of acquired brands like Alani Nu and Rockstar Energy.

Celsius has total cash of $631.2 million and total debt of $674.8 million, and its operating cash flow over the 12-month trailing period is $508.6 million.

The case for Colgate-Palmolive

Colgate-Palmolive is a global consumer products leader specializing in oral care, personal care, home care, and pet nutrition. It maintains a recurring revenue model driven by regular product replenishment. A significant customer relationship with Walmart (NASDAQ:WMT) accounted for approximately 11% of its total net sales in 2025, and customer concentration like this adds a layer of risk to the business.

According to its latest annual report for FY 2025, revenue reached close to $20.4 billion, which was a modest increase over the prior year. The company generated net income of approximately $2.1 billion during this period. These figures highlight the steady, though slower, growth typical of a large consumer staples company.

Colgate has total cash of $1.4 billion and total debt of $7.8 billion, and its total debt-to-equity ratio over the 12-month trailing period is $4.4 billion.

Risk profile comparison

Celsius faces significant risks from its heavy dependency on Pepsi for distribution and commercial strategy. Any termination of these agreements or a significant disagreement would have a material adverse effect on operations, especially given Pepsi's ownership stake and Board representation. The company is also currently facing multiple securities class action lawsuits and intense competition from larger rivals such as Red Bull and Monster Beverage (NASDAQ:MNST).

Colgate-Palmolive is exposed to macroeconomic and geopolitical instability due to its vast global operations and complex supply chain. Inflationary pressures and currency fluctuations can drive up costs for raw materials, logistics, and labor across different regions. Furthermore, the company faces vigorous competition from both multinational brands and private-label products, requiring constant adaptation to shifts in the digital retail landscape.

Valuation comparison

Celsius appears more attractively valued than Colgate-Palmolive when looking at traditional metrics, but that doesn't tell the full story.

Which stock would I buy?

These two companies offer an interesting dynamic by comparing a growth stock against a more mature company that's a Dividend King, having boosted its dividend payout for 50 or more consecutive years. Colgate has increased its dividend payout for 63 consecutive years. While each company has different dynamics, I would rather invest in Colgate over Celsius due to its more defensive nature and consistent dividend payouts. In a time where people are trying to stretch each dollar as far as possible, they may cut back on energy drinks, but they won't cut back on the household essentials Colgate-Palmolive offers.

While Celsius has shown explosive stock price growth, shareholders have also seen significant stock price declines, and the Celsius stock price is down nearly 54% over the last 12 months. In comparison, Colgate shares are up nearly 22%, easily outperforming not only Celsius but also the S&P 500's 14.3% return. Between the two, especially amid so much market uncertainty, I would rather own the steady performer that pays consistent dividends.

Jack Delaney has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Colgate-Palmolive, Monster Beverage, Shopify, and Walmart. The Motley Fool recommends Celsius Holdings. The Motley Fool has a disclosure policy.