Church & Dwight Co Inc (CHD, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $105.81, Church & Dwight Co Inc has witnessed a daily loss of 0.05%, marked against a three-month change of 3.44%. A thorough analysis, underlined by the GF Score, suggests that Church & Dwight Co Inc is well-positioned for substantial growth in the near future.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 7/10
- Profitability rank: 9/10
- Growth rank: 8/10
- GF Value rank: 7/10
- Momentum rank: 8/10
Each one of these components is ranked and the ranks also have positive correlation with the long term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With a high GF Score of 92 out of 100, Church & Dwight Co Inc signals the highest outperformance potential.
Understanding Church & Dwight Co Inc Business
Church & Dwight Co Inc is a leading global producer of baking soda, with a market capitalization of $25.92 billion and sales amounting to $6.05 billion. The company boasts an operating margin of 18.56%. Beyond baking soda, its product portfolio spans various categories, including laundry products, cat litter, oral care, deodorant, and nasal care, primarily under the Arm & Hammer brand. Other notable brands include Batiste, OxiClean, Vitafusion, WaterPik, Hero, and TheraBreath, which together with Arm & Hammer, account for approximately 70% of its annual sales and profits. Despite its global reach, Church & Dwight Co Inc still derives more than 80% of its sales from its home market in the US.
Financial Strength Breakdown
According to the Financial Strength rating, Church & Dwight Co Inc's robust balance sheet exhibits resilience against financial volatility, reflecting prudent management of capital structure. The Interest Coverage ratio for Church & Dwight Co Inc stands impressively at 11.4, underscoring its strong capability to cover its interest obligations. This robust financial position resonates with the wisdom of legendary investor Benjamin Graham, who favored companies with an interest coverage ratio of at least 5.
With an Altman Z-Score of 5.59, Church & Dwight Co Inc exhibits a strong defense against financial distress, highlighting its robust financial stability. With a favorable Debt-to-Revenue ratio of 0.37, Church & Dwight Co Inc's strategic handling of debt solidifies its financial health.
Profitability Rank Breakdown
The Profitability Rank shows Church & Dwight Co Inc's impressive standing among its peers in generating profit. The Piotroski F-Score confirms Church & Dwight Co Inc's solid financial situation based on Joseph Piotroski's nine-point scale, which measures a company's profitability, funding, and operating efficiency. Church & Dwight Co Inc's strong Predictability Rank of 4.0 stars out of five underscores its consistent operational performance, providing investors with increased confidence.
Growth Rank Breakdown
Ranked highly in Growth, Church & Dwight Co Inc demonstrates a strong commitment to expanding its business. The company's 3-Year Revenue Growth Rate is 6.9%, which outperforms worse than 51.98% of 1,768 companies in the Consumer Packaged Goods industry. Moreover, Church & Dwight Co Inc has seen a robust increase in its earnings before interest, taxes, depreciation, and amortization (EBITDA) over the past few years. Specifically, the three-year growth rate stands at 2.7, and the rate over the past five years is 3.5. This trend accentuates the company's continued capability to drive growth.
Conclusion
Church & Dwight Co Inc's financial strength, profitability, and growth metrics, as highlighted by its impressive GF Score, underscore the firm's unparalleled position for potential outperformance. The company's strategic initiatives, robust financial health, and consistent growth trajectory make it a compelling choice for value investors seeking long-term gains. For those interested in exploring more companies with strong GF Scores, GuruFocus Premium members can utilize the following screener link: GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
