Company Review Thursday: Church & Dwight

Church & Dwight Co. Inc is the company behind the famous Arm & Hammer brand products, the First Response Pregnancy Test, the Trojan Condom brand and OxyClean Stain Removal brand. Most people wouldn’t know anything about Church & Dwight unless they saw the logo, which is the all familiar arm and hammer design seen on the Arm & Hammer baking soda packages. Church & Dwight has consistently been known to produce quality household items since 1896, but MJ wants to know if this company can consistently grow from its current price point for the next few years. What MJ wants, MJ gets…maybe a week later, but regardless:

Company Snapshot Yahoo! Finance Data)
Name:  Church & Dwight Co. Inc.
Ticker: CHD
Current Price: $92.18 (as of 3/31/2016)
52 Week High Price:$92.72
52 Week Low Price: $76.85
Market Capitalization: $11.96B (Large Capital)
Price/Earnings (P/E Ratio): 30.03
Earnings/Share (EPS): $3.07
Dividend: $1.42/year (1.55% yield)
Industry: Consumer (Products) Staples
Primary Business: Cleaning Goods

The Good, The Bad and The Ugly
One of the most interesting things about this company is that it has held dearly to its roots in producing bicarbonate of soda and has pretty much become the face of baking soda here in the United States. The Arm&Hammer brand has been around over a century and has successfully solidified its place in many bathroom cabinets, kitchen pantries and laundry rooms. With this type of staying power and brand recognition it’s kind of hard to think Church & Dwight will go out of business any time soon since 40% of their products belong to this brand line. The rest of their products have actually only been acquired over the last 15 years.

The other super great thing about this company is that the return on equity (ROE) has increased over the last 5 years. Remember this metric shows how well a company uses the money they get from their shareholders and since MJ wants to make money this metric should really be important to him.

Year Return on Equity
2011 14.49%
2012 16.51%
2013 17.40%
2014 19.23%
2015 19.48%

Analysts say that the price target for Church &Dwight is at about $97/share, but based on their last quarter numbers and the CEO’s pleasure with the way 2015 looked, I’m thinking some analyst may consider upgrading their price target just above $100. I’m thinking somewhere in the 102-$105 range would be suitable. They got slammed with taxes and interest payments on financing activities last year and they’ve taken on a pretty sizable amount of debt over the past 5 years.

You mix that all up and you get a pretty middle of the road type of company. I think it could get to be above $100 and the dividend would probably suck me in if I had that kind of money to spend on what seems to be a value-type stock. But since my portfolio focus right now is growth, I’ll have to wait for a lower price point to jump in personally.

Until next time folks…


*Nothing in this post is any type of advice. Just giving my perspective on this company*

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