When times get tough for the economy, you want to make sure you own plenty of defensive stocks. One of my favorite consumer staples stocks is Church & Dwight (CHD), notes Eddy Elfenbein, editor of Growth Stock Advisor.
They own several well-known brands like Arm & Hammer, OxiClean, and Trojan. C&D also makes Nair depilatory products, First Response pregnancy tests, Orajel toothpaste, L’il Critters and SpinBrush toothbrushes.
Check out the long-term performance of Church & Dwight. Since 2000, the stock is up more than 900% while the S&P 500 is up 91%. Frankly, it’s hard to see how you can go wrong selling baking soda and condoms.
I’ll give you a good example of how a defensive stock can serve your portfolio. Between January 9 and March 18 of this year, the S&P 500 fell over 26%. This was during some of the worst times of the COVID-19 panic. The virus was spreading quickly and no one knew what to do.
During that same stretch, not only did shares of Church & Dwight not plunge, but they actually gained a little ground. There weren’t many stocks that rallied while everyone else was scared.
Now we’re in earnings season. This is the equivalent of Judgement Day for stocks. It’s when we learn who has been raking in profits and who has been lagging the pack.
Church & Dwight said it made 83 cents per share for Q1, beating Wall Street’s consensus by six cents. Previously, the company had told us to expect 73 cents per share, so they’re even running ahead of their own plans.
But here’s what caught my attention. Church & Dwight says it benefited from the coronavirus outbreak, especially brands like Arm & Hammer and some hygiene products.
Gummy vitamins and cat litter? With first-quarter sales at almost $1.17 billion, the numbers don’t lie. Church & Dwight is a solid blue-chip defensive stock that’s poised to prosper in good times and bad.
Earlier this year, the company hiked its dividend for the 24th year in a row. Church & Dwight is a strong buy in uncertain times.
