Is This Expensive Stock Getting Cheap?

In partnership with

A consumer staple dividend growth stock with a portfolio of fantastic products?

That’s a good way to describe Church & Dwight Co., Inc. ($CHD). Founded all the way back in 1847, this is a consumer staple business that makes a lot of great products but is also overshadowed by bigger-name firms like Procter & Gamble or Colgate-Palmolive.

Church & Dwight owns the Arm & Hammer, Trojan, OxiClean, and Orange Glo brands.

Many of these brands operate across multiple consumer categories. Arm & Hammer’s product line, for example, includes: baking soda, toothpaste, deodorant, laundry detergent, and cat litter.

Church & Dwight is a stock that I’ve owned for years.

However, I’ve never added to this position, beyond dividend reinvestment, because Church & Dwight stock usually trades at an extreme valuation.

Year-to-date, Church & Dwight is down -11.48%. Yet, the company still trades at a price to earnings ratio of 26.33 while offering a 1.29% starting dividend yield. This is a company that is almost as expensive as the S&P 500, without the double-digit returns.

Over the past decade, Church & Dwight has delivered a 10-year average annual total return of 9.54%.

Additionally, the firm’s 5-year compound annual dividend growth rate is a lackluster 4.29%. On the flip side, the company does have a low payout ratio of just 33.87%.

So why am I reviewing a company that’s trading at tech stock valuations while delivering utility stock returns? Simple. For many years Church & Dwight was a reasonably priced business that delivered inflation-beating dividend growth.

In 2017, the company raised its dividend by 7%.

And in 2018, Church & Dwight hiked its payout by 14.5%.

The anemic dividend growth really began in 2019. And much of this slowdown is the result of Church & Dwight’s recent acquisition spree. The company purchased self-care brand Touchland earlier this year. And the company also bought Hero Cosmetics in 2022, as well as TheraBreath in 2021.

While I’m not a big fan of the firm’s slow dividend growth and high valuation, Church & Dwight is selling off right now. And if this stock came down another 20%, something that actually happened in 2022 on news of the Hero Cosmetics acquisition, I’d certainly consider buying.

Until then, this company will remain on the watchlist.

Stop Drowning in Market News. Focus On Making Money.

Every day: 847 financial headlines, 2,300 Reddit stock mentions, 156 Twitter trading threads, 12 IPO updates, 94 crypto developments.

Your problem isn't lack of information; you have too much.

While you're scanning headlines wondering what matters, profitable trades slip by. The signal gets buried in noise.

What if someone did the heavy lifting for you?

Stocks & Income reads everything:

• Twitter traders

• Reddit buzz

• IPO announcements

• Crypto insider takes

• Crowdfunding opportunities

• Market news

Then we send you only what can actually move your portfolio.

No fluff. No useless news. Just actionable stock insights in 5 minutes.

We track every source so you don't have to. You get the 3-5 opportunities worth your time, delivered daily.

Stop wasting time on useless “investing news” and start thinking critically about real opportunities in the stock market.

Subscribe to Stocks & Income

_{Stocks & Income is for informational purposes only and is not intended to be used as investment advice. Do your own research.}

Disclaimer: This article is for entertainment purposes only. It is not financial advice, always do your own research.