Church & Dwight (CHD) is a quality company that owns iconic brands such as Arm & Hammer, Trojan, and Orajel. Shares are barely up this year and down by roughly 5% for a one-year period. I think now might be a good time to consider shares while they're taking a breather.
Why Church & Dwight is a quality company
Just because Church & Dwight owns solid brands that are relatively recession-resistant doesn't necessarily make it a great company. Management, as well as management's capital allocation skills, are important - especially for a firm building its business primarily through acquisitions.
I decided to gather some data from the firm's most recent annual report to build the below model (and all others in the article, unless otherwise noted) to illustrate its economic spread, that is, the difference between its return on invested capital, or ROIC, over its weighted average cost of capital, or WACC.
