Church & Dwight: Tops among Splits

12/01/2016 3:47 pm EST


Neil Macneale III

Editor, 2 for 1 Stock Split

Each month, Neil Macneale assessing all stocks that have announced upcoming stock splits; from those, he chooses one stock to be included in the model portfolio of his 2-for-1 Stock Split Newsletter.

We had three split announcements in October. The first was USANA Health Sciences (USNA), which is a direct marketing company in the nutritional supplement business.

There is a lot to like here in the way of good fundamental numbers, including zero long-term debt, but there is no dividend and and USNA stock is somewhat more volatile than the overall market.

The stock does not yet earn our buy rating, but we’ll be evaluating this stock again over the next several months.

Second, Integra LifeSciences (IART) manufactures and markets surgical implants and medical instruments.

The stock price volatility is lower than the overall market but earnings and growth numbers have been on a roller coaster over the last few years.

A price-to-earnings multiple over 50 also pulls this one down in our rankings, making it unacceptable as a buy for our portfolio.

For our latest recommendation I’m going to go with Church & Dwight (CHD), a company that has been waiting its turn since its 2 for 1 split announcement last August.

CHD is a consumer products, non-cyclical business; in other words, a defensive stock, perfect for unsettled times in the financial markets.

Church & Dwight is not a name familiar to many, but its brands are familiar to almost everyone.

CHD makes and sells hundreds of household products ranging from Arm & Hammer baking soda to Trojan condoms. Other brand names include Oxiclean, Arrid, and Pepsodent.

Over the last few months CHD’s ranking score has increased in both relative and absolute terms. Very low volatility and a nice dividend are the standout numbers here.

In addition, steady growth and healthy margins contributed to put CHD at the top of the list this time around. It’s especially nice to have this defensive position added to the portfolio at this particular time.

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