Church & Dwight Co Inc's Dividend Analysis
Understanding the Dividend Prospects of Church & Dwight Co Inc
Church & Dwight Co Inc (NYSE:CHD) recently announced a dividend of $0.27 per share, payable on 2023-12-01, with the ex-dividend date set for 2023-11-14. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Church & Dwight Co Inc's dividend performance and assess its sustainability.
What Does Church & Dwight Co Inc Do?
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Church & Dwight is the leading global producer of baking soda. Beyond baking soda, the products in its portfolio have vast category reach, including laundry products, cat litter, oral care, deodorant, and nasal care, all sold under the Arm & Hammer brand. Its mix also includes Xtra, Trojan, OxiClean, First Response, Nair, L'il Critters/Vitafusion, Orajel, and WaterPik, which together with Arm & Hammer constitute more than 80% of its annual sales and profits. In early 2019, the firm announced the addition of Flawless, which manufactures electric shaving products for women. At the end of 2020, the firm acquired Zicam, a leading brand in the cough/cold-shortening category. Church & Dwight derives more than 80% of its sales from its home market in the U.S.
A Glimpse at Church & Dwight Co Inc's Dividend History
Church & Dwight Co Inc has maintained a consistent dividend payment record since 1985. Dividends are currently distributed on a quarterly basis. Church & Dwight Co Inc has increased its dividend each year since 1985. The stock is thus listed as a dividend aristocrat, an honor that is given to companies that have increased their dividend each year for at least the past 38 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Church & Dwight Co Inc's Dividend Yield and Growth
As of today, Church & Dwight Co Inc currently has a 12-month trailing dividend yield of 1.20% and a 12-month forward dividend yield of 1.21%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Church & Dwight Co Inc's annual dividend growth rate was 4.90%. Extended to a five-year horizon, this rate increased to 6.20% per year. And over the past decade, Church & Dwight Co Inc's annual dividends per share growth rate stands at 7.90%.
Based on Church & Dwight Co Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Church & Dwight Co Inc stock as of today is approximately 1.62%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-09-30, Church & Dwight Co Inc's dividend payout ratio is 0.61.
Church & Dwight Co Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Church & Dwight Co Inc's profitability 9 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Church & Dwight Co Inc's growth rank of 9 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Church & Dwight Co Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Church & Dwight Co Inc's revenue has increased by approximately 8.10% per year on average, a rate that outperforms approximately 54.86% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Church & Dwight Co Inc's earnings increased by approximately -11.80% per year on average, a rate that outperforms approximately 27.89% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -3.80%, which outperforms approximately 28.37% of global competitors.
Next Steps
In conclusion, Church & Dwight Co Inc's track record as a dividend aristocrat and its consistent dividend growth rate reflect a strong commitment to returning value to shareholders. With a manageable payout ratio and robust profitability, the company demonstrates its ability to sustain and potentially grow its dividends. Furthermore, the solid growth metrics provide an optimistic outlook for future performance. As investors consider adding Church & Dwight Co Inc to their portfolios, they should also consider the company's future growth potential and the stability of its dividend payments. For those seeking to discover more high-dividend yield opportunities, GuruFocus Premium users can utilize the High Dividend Yield Screener to identify promising investments.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
