Summary
- Church & Dwight shares have often traded at a premium.
- For new investors, waiting until shares pull back to a reasonable multiple is ideal.
- The company doesn't offer high growth or a high yield but does offer potential.
Church & Dwight (CHD) shares often trade at a premium to the market and to peers. I believe this is due to the company being the smallest of its peer group and thus offering the potential for the most growth. As a smaller player in the consumer goods space, Church & Dwight has the ability to grow its portfolio of brands or even be acquired. Despite this, the company is not growing at an impressive enough pace to warrant the premium shares currently fetch. For new investors, waiting until the stock pulls back would be a better idea.
Performance
As an investor, I have no problem purchasing a stock at a premium if the growth story is in tact and the premium is reasonable versus growth. However, if the premium to peers and the market is quite high, the company better have some ambitious plans in place and a way to reach them.
In the most recent quarter, Church & Dwight miss on the bottom line with in line revenue.
