Church & Dwight may be undervalued with poor growth indicators, but the 19 analysts following the company give it an rating of hold. Their target prices range from $73.0 to $115.0 per share, for an average of $97.53. At today's price of $86.97, Church & Dwight is trading -10.82% away from its average target price, suggesting there is an analyst consensus of some upside potential for the stock.
Church & Dwight Co., Inc. develops, manufactures, and markets household, personal care, and specialty products. Based in Ewing, NJ, the Large-Cap Consumer Discretionary company has 5,750 full time employees. Church & Dwight has provided a 1.3% dividend yield over the last 12 months.
Church & Dwight has a trailing twelve month P/E ratio of 41.0, compared to an average of 20.93 for the Consumer Discretionary sector. Considering its EPS guidance of $3.73, the company has a forward P/E ratio of 23.3.
Church & Dwight is also overpriced compared to its book value, since its P/B ratio of 4.82 is higher than the sector average of 2.93. The company's shares are currently 183.4% below their Graham number, indicating that its shares have a margin of safety.
The question is, why does Church & Dwight have a bad rating if it is apparently undervalued in terms of traditional metrics? One reason could be the company's disappointing rate of margin growth, which in the analysts' opinion, will continue in coming years.
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $4,358 | $4,896 | $5,190 | $5,376 | $5,868 | $6,107 |
| Gross Margins | 46% | 45% | 44% | 42% | 44% | 46% |
| Net Margins | 14% | 16% | 16% | 8% | 13% | 10% |
| Net Income (M) | $616 | $786 | $828 | $414 | $756 | $585 |
| Net Interest Expense (M) | $74 | $61 | $54 | $90 | $111 | $95 |
| Depreciation & Amort. (M) | $64 | $66 | $68 | $67 | $73 | $83 |
| Diluted Shares (M) | 252 | 252 | 250 | 246 | 248 | 247 |
| Earnings Per Share | $2.44 | $3.12 | $3.32 | $1.68 | $3.05 | $2.37 |
| EPS Growth | n/a | 27.87% | 6.41% | -49.4% | 81.55% | -22.3% |
| Avg. Price | $68.46 | $78.12 | $84.38 | $95.49 | $94.56 | $86.52 |
| P/E Ratio | 27.38 | 24.41 | 24.96 | 55.84 | 30.5 | 36.05 |
| Free Cash Flow (M) | $791 | $891 | $875 | $706 | $807 | $976 |
| CAPEX (M) | $74 | $99 | $119 | $179 | $224 | $180 |
| EV / EBITDA | 20.45 | 19.0 | 20.43 | 38.36 | 22.42 | 25.08 |
| Total Debt (M) | $1,810 | $1,812 | $3,010 | $2,600 | $2,602 | $2,205 |
| Net Debt / EBITDA | 1.83 | 1.49 | 2.41 | 3.5 | 2.0 | 1.39 |
| Current Ratio | 0.88 | 0.8 | 0.59 | 1.18 | 1.08 | 1.7 |
