Popular Brands Fuel Church & Dwight Dividend Growth
Like many consumer staple stocks, Church & Dwight's business may not be the most exciting in the world. But sometimes boring is just fine in the market, especially when boring means a consistent track record of earnings and sales growth and dividend stability.
Church & Dwight ( CHD ) markets a variety of household, personal care, and specialty products under various brand names. It's mostly known for its Arm & Hammer brand, but other brands include Trojan, OxiClean and Orajel.
A few days before the company's fourth-quarter earnings release in early February, Church & Dwight announced a 17% increase in the regular quarterly dividend from 24 cents to 28 cents a share, the company's 448th regular consecutive dividend.
The company reported fourth-quarter earnings at 57 cents a share, up 30% from a year earlier. Sales growth accelerated nicely from the third quarter's 3% growth, rising 11% to $809.7 million on a year-ago basis.
The bulk of the company's sales come from its Consumer Domestic unit. Here, sales rose 17% to $609.4 million, helped by strong sales of Arm & Hammer liquid laundry detergent, cat litter and toothbrushes. Its Trojan brand also did well.
At its Consumer International segment, sales fell 6% to $136.3 million even though sales in Australia, Canada, Brazil and Mexico did well.
CEO James Craigie said the company expects to generate more than $1.2 billion in free cash flow over the next three years.
First-quarter earnings will be discussed at the May 2 conference call, a half-hour after the open. The Thomson Reuters consensus estimate calls for profit of 72 cents a share, up 9% from a year ago. Sales growth is seen accelerating from Q4, rising 13% to $776.6 million.