Church & Dwight (CHD)
Consumo básico / Cuidado del hogar y personal
A portfolio of leading brands in consumer niches (baking soda, condoms, water flossers, depilatories) with a wide but eroding moat from private label; at $102 (near highs, 24× EBIT) after raising FY2026 guidance twice, base 5-year ~$112 (+3% total): Preserves value — a solid business at a price that already prices in the acceleration.
- Price
- $102.00
- Intrinsic value (5y, base)
- $112
- Total annual return (5y)
- 3.2%
- Status (nominal)
- Preserves value
- Margin of safety
- No margin
The essentials
- Portfolio of seven formally designated power brands (Arm & Hammer, OxiClean, Batiste, Waterpik, TheraBreath, Hero and Touchland) that concentrate ~70% of sales and profits, with #1 or #2 positions in most of their categories — a real brand and distribution moat, but under pressure from private label and demographic shifts in specific categories; Trojan, the condom leader, is not included on that list despite being #1 in its category.
- Reported growth was weighed down in 2025-26 by the voluntary portfolio restructuring (exit of Flawless/Spinbrush/Waterpik showerheads, sale of the vitamins and supplements business), while organic growth accelerates: +5.8% in Q2 2026, with the company raising FY2026 guidance twice during the year (organic now +4-5%, reported EPS +20-22%).
- At $102 (near 52-week highs) it trades at 24× EV/EBIT — expensive vs. the terminal multiple of the mix after compression (~17.7×). Total return +3% lands in the lower end of the method's range: the business is quality, but the price already priced in much of the acceleration just guided.
Intrinsic value — two valuation methods
Total return at 5 years: 3.2%/year = 1.9% appreciation + 1.3% dividend. The target price ($112) is ex-dividend; the $7 in dividends collected over 5 years are added separately.
By both methods, the value today (DCF $91 · Multiples $96) is below the market price ($102).
Pillars of the analysis
The verdict — today vs 5 years
Today — expensive, no margin of safety: at $102 trades ~6.3% above its value discounted to today (~$96); the expected return does not even reach the risk-free rate (4.5%).
At 5 years — Preserva valor: the target price ($112) plus dividends yield just enough to preserve nominal capital, below the required 4% floor.
The bridge: the return at 5 years falls below the risk-free rate (4.5%) — which is why there is not even a discount to today's value. To require a 15% annual return, it would need to be bought at ~$60.
Thesis
The business
Church & Dwight is a portfolio of leading brands in mass consumer niches, with defensible #1/#2 positions in most of its categories and a capital-light model (capex ~2% of revenue). Reported growth was dragged in 2025-26 by a voluntary portfolio restructuring (exit of low-growth businesses, Touchland acquisition), while organic accelerates (+5.8% in Q2'26) and the company raised its FY2026 guidance twice in the year.
Valuation
Valued by EV/EBIT in sum of the parts: the consumer business (~96% of EBIT) at a consumer staples multiple, and Specialty Products Division (~4%, B2B chemicals) at a lower commodity/industrial multiple. Year 1 anchors in both legs of the guidance raised on Jul-31-2026 (revenues ~flat, reported EPS +20-22% from not repeating 2025 charges); today's entry multiple (24×) compresses toward the terminal mix multiple. That gives ~$112/share at five years → +2%/year of price appreciation, +3% total with the dividend.
Margin of safety
No margin of safety: at this price capital is preserved, but it is not bought below its value. Total return +3% lands in the lower end of the method's scale. The verdict is Preserves value: business quality is not in doubt, but near its historical high and at 24× EV/EBIT, the price already factors in much of the acceleration just guided.
What to watch
The central disconfirmer is private label: if the distribution loss already observed in stain removers, diagnostic kits and oral analgesics spreads to the power brands, pricing power weakens and the thesis with it. Also watch whether the guided +4-5% organic growth holds beyond 2026 (part of it is an easy comparison against the 2025 divestitures, not pure acceleration) and the integration of Touchland/Miss Mouth's into the long-term growth algorithm.
Educational / informational. Does not constitute investment advice.