Church & Dwight Company Inc (CHD)

Conclusion

Church & Dwight makes household, personal care and specialty products, including ARM & HAMMER, OXICLEAN, WATERPIK and TROJAN. On 2026-11-09 the share price was 111.31 USD, giving a market capitalisation of 26.3 billion USD.

The verdict is fair. The fair value band runs from 75.92 to 113.88 USD with a midpoint of 94.90 USD, giving a margin of safety of -14.7% at the current price. The discounted cash flow gives 82.43 USD per share, and the fair value from historical multiples is 107.37 USD. The P/E of 33.9 is above its ten-year median of 30.2, and EV/EBITDA of 21.8 is above its median of 20.3. The reverse DCF implies growth of 9.2%, against revenue growth of 4.9% a year over five years and free cash flow per share growth of 4.8%. The price therefore assumes faster growth than the company has delivered.

What holds the case up: trailing free cash flow conversion of 136.5%, a return on invested capital of 12.8% against a WACC of 8.5%, and an Altman Z-score of 5.35. What would break it: a current ratio of 0.96, five-year EPS growth of -0.7% a year, and a P/E premium of 12.3% to its own history if earnings growth slows.

Financial health

Financial strength is green, with three of four measures assessed good. Net debt to EBITDA is 1.37x and interest coverage is 10.9 times, both comfortable. Debt to equity is 0.49. The current ratio of 0.96 and quick ratio of 0.58 are the weak spots: the current ratio is only neutral, so short-term liabilities are roughly matched by short-term assets rather than covered by a margin. The Altman Z-score of 5.35 sits in the safe zone. Insolvency risk: low, about 0.6% by the estimate of the Ohlson model over one to two years, based on year-end 2025 figures.

Earnings quality

Earnings quality is green, with all four measured signals assessed good. Free cash flow conversion is 136.5% on a trailing basis and 134.3% over five years, so reported profit is backed by cash. The accrual ratio of -5.4% points the same way. Stock-based compensation is 1.2% of revenue, and free cash flow after it is 983.5 million USD. The share count has fallen by 0.6% a year over five years, which indicates net buybacks. The Piotroski score is 7 out of 9, and the Beneish M-score of -2.71 is in the unlikely range for manipulation. The company beat estimates in six of the last eight quarters, with an average surprise of 3.5%. Current-year estimates were revised down 0.1% over 90 days, while next-year estimates rose 0.2%.

Profitability

Profitability is green. The gross margin of 46.1% is above its ten-year median of 45.0%, while the operating margin of 18.0% and net margin of 12.4% are below their medians of 19.2% and 13.4%. Operating margin stability is 17.6%. The most important figure is return on invested capital of 12.8% against a WACC of 8.5%, which the company reports as a return above its cost of capital of 4.3% points. Return on equity of 17.3% is flattered by leverage. The DuPont split shows a net margin of 11.9%, an asset turnover of 0.70 and an equity multiplier of 2.23, so balance-sheet gearing contributes materially to the headline return.

Growth

Growth is yellow, with one signal good, two neutral and one bad. Revenue compound growth is 4.9% over three years, 4.9% over five years and 6.2% over ten years. Revenue has grown in all ten of the last ten years. Earnings per share show a sharp three-year rise of 21.5% a year, but a five-year decline of 0.7% a year and a ten-year rise of 7.0% a year, so the recent recovery is not yet a longer-term trend. Free cash flow per share grew 16.0% a year over three years, 4.8% over five years and 8.2% over ten years. Next-year earnings growth is estimated at 7.2%.

Valuation

Valuation is yellow, with a neutral reading on the verdict, which is fair. Against their own ten-year medians, the P/E of 33.9 is 12.3% above its median of 30.2, EV/EBITDA of 21.8 is 7.2% above 20.3, and price to free cash flow of 24.8 is 3.7% above 24.0. Price to book of 5.9 is 9.5% below its median of 6.5. The discounted cash flow gives 82.43 USD per share at a discount rate of 8.9%, with the terminal value making up 56.8% of the result. The fair value from historical multiples is 107.37 USD. The fair value band is 75.92 to 113.88 USD, and the margin of safety is -14.7%. The reverse DCF implies 9.2% growth against 4.9% revenue growth over five years. The dividend yield is 1.1% and the payout on free cash flow is 27.5%. The fair value figures are an order of magnitude built on fixed assumptions, not a price target.

Risks

The largest risk is that the price assumes more growth than the company has delivered. The reverse DCF implies 9.2%, while revenue has grown 4.9% a year over five years and free cash flow per share 4.8%. If growth stays near its history, the discounted cash flow value of 82.43 USD sits well below the current price. A second risk is the thin short-term liquidity, shown by the current ratio of 0.96 and quick ratio of 0.58, which leaves less cushion if cash flow dips. Third, the 5-year EPS decline of 0.7% a year means the recent earnings rebound has not yet proven durable. This analysis has no debt maturity schedule and no revenue by segment, so refinancing timing and the contribution of each business line cannot be assessed.