Church & Dwight develops, manufactures, and markets household, personal care, and specialty products. The company was founded in 1846 and is based in Ewing, New Jersey.
CHD Price Forecast Based on DCF Valuation
DCF Fair Value Target:
The table below illustrates the output of a discounted cash flow forecast using a variety of scenarios for Church & Dwight Co Inc. To summarize, we found that Church & Dwight Co Inc ranked in the 37th percentile in terms of potential gain offered. We should note, though, that the most conservative analysis suggests this stock will yield negative results -- and thus may be a potential short opportunity. The most interesting components of our discounted cash flow analysis for Church & Dwight Co Inc ended up being:
Interest coverage, a measure of earnings relative to interest payments, is 14.05 -- which is good for besting 81.3% of its peer stocks (US stocks in the Consumer Defensive sector with positive cash flow).
The business' balance sheet suggests that 7% of the company's capital is sourced from debt; this is greater than merely 18.12% of the free cash flow producing stocks we're observing.
CHD's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 40.85% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
Want more companies with a valuation profile/forecast similar to that of Church & Dwight Co Inc? See LW, RAD, DL, CLX, and KMB.
In my last article on Church & Dwight (CHD) at the end of July right before Q2 earnings were announced, I noted that: "Demand is likely to have been at all-time highs in Q2-20 but is far from being sustainable." As predicted, CHD came in strong in Q2-20, reporting a...
Beulah Meriam K on Seeking Alpha | September 16, 2020