CHD

Church & Dwight Co.Inc.

Consumer


Presented:12/06/2018
Price:$66.72
Cap:$16.43B
Current Price:$104.35
Cap:$25.55B

Presented

Date12/06/2018
Price$66.72
Market Cap$16.43B
Ent Value$16.82B
P/E Ratio20.22x
Book Value$9.57
Div Yield1.3%
Shares O/S246.23M
Ave Daily Vol1,799,970
Short Int5.88%

Current

Price$104.35
Market Cap$25.55B
Church & Dwight Co., Inc. engages in the development, manufacture, and market of household, personal care, and specialty products. It operates through the following segments: Consumer Domestic, Consumer International, and Specialty Products. The Consumer Domestic segment offers household products, such as laundry detergents, fabric softener sheets, cat litter, and household cleaning products; and personal care products including antiperspirants, oral care products, depilatories, reproductive health products, oral analgesics, nasal saline moisturizers, and dietary supplements. The Consumer International segment offers personal care products, household and over-the counter products in Canada, France, Australia, China, the United Kingdom, Mexico, and Brazil. The Specialty Products segment consists of sales to businesses which participated in different product areas, namely animal productivity, specialty chemicals, and specialty cleaners. The company was founded by Dwight John and Austin Church in 1846 and is headquartered in Ewing, NJ.

Publicly traded companies mentioned herein: Amazon.com Inc (AMZN), Beiersdorf AG (BEI GR), Church & Dwight Co Inc (CHD), Energizer Holdings Inc (ENR), Johnson & Johnson (JNJ), Procter & Gamble (PG)

Highlights

The presenter is short shares of Church & Dwight (CHD), the manufacturer of consumer products including Arm & Hammer, Trojan condoms, and OxiClean, among other products. Despite positive perception of the stock, which is up ~33% YTD, and strong growth (9% top-line and more than 10% EPS), the growth story for the company seems to be misunderstood and overvalued by the market. The stock is currently trading at ~$66 (27x earnings and 21x – 22x EBITDA), a premium over competitors due to significant organic growth. Deceleration of its major growth product Batiste Dry Shampoo, disruption of online business by Amazon, loss of market share to other major players, and stripping out impacts from tax reform leads the presenter to value the stock at ~$45 based on 16x EBITDA.

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Idea Discussion

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