The firm said it raised its rating on the company, which develops, manufactures, and markets a variety of household, personal care, and specialty products, based on Church's low currency exposure, and BMO's belief the company will benefit from low energy prices.
"We're rising our rating on Church & Dwight...because it's a largely domestic business which we think will be seen as a safe haven as earnings of the multiple consumer companies are revised downward in the face of negative FX pressure," BMO said.
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Separately, TheStreet Ratings team rates CHURCH & DWIGHT INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate CHURCH & DWIGHT INC (CHD) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, solid stock price performance and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- CHD's revenue growth has slightly outpaced the industry average of 1.3%. Since the same quarter one year prior, revenues slightly increased by 4.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- CHURCH & DWIGHT INC has improved earnings per share by 11.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, CHURCH & DWIGHT INC increased its bottom line by earning $2.78 versus $2.45 in the prior year. This year, the market expects an improvement in earnings ($3.03 versus $2.78).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Household Products industry average. The net income increased by 7.4% when compared to the same quarter one year prior, going from $107.90 million to $115.90 million.
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
- The current debt-to-equity ratio, 0.50, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.75 is somewhat weak and could be cause for future problems.
- You can view the full analysis from the report here: CHD Ratings Report