In the past 30 days, 10 analysts have increased the earnings estimates for this consumer company.
Church & Dwight Co., Inc. (CHD)
From Sure Dividend
Church & Dwight Co., Inc. (CHD) was founded in 1846 and has grown to reach a market cap of $13.7 billion. This makes the company smaller than some of the giants in the consumer products industry. A few of the company’s larger competitors are below:
• Procter & Gamble (PG) has a $207 billion market cap
• Unilever (UL) has a $168 billion market cap
• Colgate-Palmolive (CL) has a $58 billion market cap
While Church & Dwight is not the largest player in its industry, it is one of the most successful over the last decade. And, it controls many brands that are likely to exist far into the future and perform well regardless of the overall economy.
The company’s original power brand is Arm & Hammer. Church & Dwight has expanded from Arm & Hammer, and now controls other well-known brands, including: Trojan, Orajel, and OxiClean. Church & Dwight has leveraged its brands intelligently. The company has both expanded the reach of its own brands and used these cash flows to acquire other high quality brands. From 2008 through 2017 Church & Dwight compounded its earnings-per-share at 11.6% annually. We expect continued earnings-per-share growth of approximately 9% per year.
The one downside to Church & Dwight is the company’s valuation. The company’s historical average price-to-earnings ratio over the last decade is 21.5.
We expect Church & Dwight to generate earnings-per-share of $2.27 in 2018. Using expected 2018 earnings-per-share, Church & Dwight is currently trading for a price-to-earnings ratio of 24.6, which is in excess of its historical average valuation.
We recommend prospective investors wait for Church & Dwight to fall below its historical average price-to-earnings ratio of 21.5 before adding shares of this high quality business.
Ben Reynolds, Sure Dividend, www.suredividend.com, ben@suredividend.com, August 16, 2018