Church & Dwight (NYSE:CHD) It may not really be a household name, but you may have heard of the company’s many brands: ARM & Hammer, Trojan, First Response, Nair, Spinbrush, OxiClean, Orajel, Vitafusion, Waterpik, and Zicam.
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If you already know some of the company’s powerhouse brands, you may be closer to considering a serious investment. Let’s take a look at Church and Dwight’s background, what you need to know before investing (the reasons you’re considering the company and the reasons you want to steer clear of it) and whether the company makes sense for your specific investment needs. Is. let’s get started.
About Church & Dwight Company Inc.
Church & Dwight Company Inc., a manufacturer of household products and headquartered in Ewing, New Jersey, is known for the wide variety of products that diverge from that line, including ARM & Hammer baking soda and laundry detergent and toothpaste.
The company started in the mid-1800s. In 1846, Dr. Austin Church and John Dwight, brother-in-law, released bicarbonate of soda (baking soda), known today as ARM & Hammer, for commercial distribution. Their first factory starts in Dwight’s kitchen and were packaged in paper bags.
In the 1980s and 1990s, ARM & HAMMER launched the first detergent with baking soda, both powdered and liquid laundry detergent, and later removed toothpaste, carpet deodorizer, and cat litter.
In the early 2000s, Church & Dwight acquired Carter Wallace’s consumer business, which included personal care brands Trojan, First Response, Nair, and Arid.
In 2006, the company expanded its household brand portfolio when it acquired Orange Glo International and OxiClean, Kaboom Bathroom Cleaners and Orange Glo household cleaning products. It also bought Orajel in 2008, Batiste dry shampoo in 2010 and the nasal hygiene brand Simple Saline. It also acquired the cat litter brand Feline Pine.
The company also acquired Agro Biosciences and Microbial Terroir, a platform for proprietary microbial solutions, in 2017 and acquired Water Pick Inc. In 2019, it acquired Flawless, which offers an array of electric hair removal products.
In Q1 2022, net sales increased 4.7% to $1,297.2 million. Organic sales grew 2.7% and pricing rose 7.8%, offsetting a -5.1% volume decline due to supply chain disruption and pricing elasticity. Q1 2022 EPS was $0.83, which decreased by 5.7% compared to 2021.
Reasons to Consider Investing in Church & Dwight Stock
Why would you want to buy Church & Dwight stock? let’s take a look:
- Strong Consumer Demand: The company continues to experience strong consumer demand due to its well-cultivated brands and its indestructible (or at least, recession-proof) portfolio. One reason it’s successful is its ability to bring value to consumers, offering laundry detergent brands at steep discounts compared to, for example, brands from Procter & Gamble. When people are looking for cheaper alternatives, Church & Dwight can fill that need.
- Consistent dividend increases: Church & Dwight has a 1.13% dividend yield, an annual dividend of $1.05, a dividend payout ratio of 32.21% and has offered consistent dividend growth for the past 27 years. Church & Dwight pays out 32.2% of its earnings as dividends, indicating a healthy payout ratio. The company has no trouble covering its dividend payments and will be able to do so on an ongoing basis. The company also has strong institutional ownership of its stock.
- Cash Flow: Because cash flow is important when assessing dividends, Church & Dwight’s free cash flow margin has grown steadily over the past decade. The company has an average free cash flow margin of 16.4% and a five-year average of 17.4%.
- Listens to Consumers: Church & Dwight has focused on four main brands: ARM & Hammer, OxiClean, Trojan, and Vitamins (mainly for kids, including Vitafusion and Lil’ Critters). During the pandemic, consumers formed new lockdown habits, such as the need to feel presentable thanks to Zoom calls and other at-home solutions (encouraging the use of dry shampoo, waxing and hair removal and at-home beauty regimens) ).
Learn More: Best Growth and Dividend Stocks
Reasons to stay away from Church and Dwight Stock
Why would you want to be a little careful before investing in Church & Dwight?
- Poor performance compared to competitors: Recently, the stock has underperformed compared to some competitors such as Johnson & Johnson, Procter & Gamble Company and Reckitt Benckiser Group plc.
- Not the strongest around: It is always possible to find someone bigger, faster and stronger, and dividend payers are no exception. For example, Mondelez has higher revenue and earnings claims than International and also has a lower price-to-earnings ratio, indicating that between the two companies, Mondelez is the more affordable.
Learn more: Are dividend stocks worth it?
Should you buy The Church & Dwight Company Inc. Should you consider?
As a dividend investor, you are looking for a variety of factors beyond just dividend returns. You are viewing earnings, company history, share price, market size, management and more. You are also calculating the dividend yield based on the share price and the dividend payout ratio. You probably want to include companies that have a long history of financial stability and low volatility in your basket.
Church & Dwight’s earnings per share have been rising steadily and the company has kept its earnings close to its chest (ie, within business). Its dividend growth has also been growing rapidly over the years and its low payout ratio suggests a sustainable approach to its dividend, handling all the positives.
It’s important to consider all of the company’s opportunities, as well as how well it will fit into your portfolio. Is the company going to offer you the best match for your current and future goals? Only you can decide whether this company is a match for your overall portfolio. It’s true that Church & Dwight offers a solid earnings history and balance sheet, management profile, dividend yield and earnings per share, among other perks, but it requires you to examine the broader implications of adding stocks to your already existing portfolio. is also required.
Learn More: 11 Dividend Stocks With High Returns