| Valuation method | Value, £ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 54.30 | -43 |
| Intrinsic value (DCF) | 47.27 | -50 |
| Graham-Dodd Method | 2.20 | -98 |
| Graham Formula | 21.60 | -77 |
Church & Dwight Co., Inc. (NYSE: CHD) is a leading American manufacturer of household, personal care, and specialty products, with a rich history dating back to 1846. Headquartered in Ewing, New Jersey, the company operates through three key segments: Consumer Domestic, Consumer International, and Specialty Products Division. Its diverse portfolio includes iconic brands such as ARM & HAMMER (baking soda-based products), TROJAN (sexual wellness), OXICLEAN (cleaning solutions), FIRST RESPONSE (pregnancy tests), and WATERPIK (oral care). The company also serves industrial and agricultural markets with animal productivity supplements like MEGALAC and BIO-CHLOR. Church & Dwight distributes its products through major retail channels, including supermarkets, mass merchandisers, e-commerce platforms, and specialty stores. With a market capitalization exceeding $23.6 billion, the company is a stalwart in the Consumer Defensive sector, known for its stable demand and recession-resistant business model. Its strategic focus on value-driven, branded essentials positions it well in both domestic and international markets.
Church & Dwight presents a compelling investment case as a stable, dividend-paying consumer staples company with a beta of 0.545, indicating lower volatility than the broader market. The company's diversified brand portfolio, strong free cash flow ($976.4M after capex), and consistent profitability (net income of $585.3M in FY2023) underscore its defensive appeal. However, investors should note its moderate debt load ($2.2B) and competitive pressures in the crowded household products space. The 1.6% dividend yield (based on $1.1575 annual payout) provides income support, while its focus on premiumization (e.g., WATERPIK, THERABREATH) offers growth potential. Valuation multiples should be monitored given current market cap of $23.6B and P/E ~40x (based on $2.37 EPS).
Church & Dwight competes through a dual strategy of value-oriented staples (ARM & HAMMER) and premium niche brands (WATERPIK, TROJAN). Its competitive advantage stems from: 1) Brand equity in baking soda derivatives (130+ patents), creating pricing power in categories like cat litter and deodorizers; 2) Strategic acquisitions (e.g., FLAWLEST, THERABREATH) to enter high-growth segments; 3) Vertical integration in sodium bicarbonate production, reducing input costs. However, it faces pressure from Procter & Gamble and Unilever in laundry/detergents, where scale advantages matter. The Specialty Division provides diversification but exposes it to cyclical agricultural demand. Internationally, its presence is limited compared to global peers, with 78% of 2023 revenue from North America. Supply chain efficiencies (operating cash flow of $1.16B) help maintain margins, but private label competition in commoditized categories (e.g., baking soda) remains a threat. The company's innovation pipeline (e.g., sustainable packaging, probiotic supplements) will be critical to defend market share.