A growing awareness of the health benefits of using condoms during sex is driving the sales of female and male condoms worldwide, creating profits for companies in North America and Europe.
The vast majority of condom sales are traditional latex condoms for men. In recent years, however, women have sought ways to protect themselves against sexually-transmitted diseases and unwanted pregnancy. To that end, many are now using female condoms.
Condoms fall into the Consumer Non-Cyclical Sector, which is a phenomenal space for consistent sales, even during recessions. Like peanut butter, condoms sell in both good and bad economic times.
The FC2 female condom
Shares of The Female Health Company (NASDAQ:FHCO) is up 271% over the past five years, and is up 36% year-to-date through June 28. Despite this, the company has plenty of room to grow, as it the only company that manufactures the FC2 female condom.
The FC2 female condom is the only Food and Drug Administration-approved product that is available which is controlled by a woman and offers dual protection against sexually transmitted disease (including HIV/AIDS) and unintended pregnancy. Female Health, based in Chicago, also owns certain worldwide rights to the FC2 female condom, including patents in other countries.
With a market cap of $281 million, The Female Health Company (NASDAQ:FHCO) is tiny in comparison to other condom makers. It has solid financials, however, with $6 million in cash and no debt. The company also pays a 2.8% dividend.
In its second quarter of 2013, The Female Health Company (NASDAQ:FHCO) reported $0.12 cents earnings per share, up 71% from $.07 cents in same quarter 2012. The company beat the consensus estimates of $0.08 per share by $0.04 in its latest quarterly report.
Worldwide health organizations and charities such as the Bill and Melinda Gates Foundation have donated funds for the purchase of FC2 female condoms for delivery to countries in Africa as a means to stop the spread of HIV/AIDS.
The male condom
In the male condom space, Church & Dwight Co., Inc. (NYSE:CHD), a New Jersey company that manufactures and markets Trojan condoms, has seen its stock climb 118% in the past five years and was up 15% year-to-date through June 28. The company derives significant revenue from the sale of condoms globally, but also sells many other household products such as Arm & Hammer baking soda. Church & Dwight pays a 1.9% dividend, has $279 million in cash and holds $853 million in debt. In first quarter of 2013, the company earned $0.76 per share, up 15% from $0.66 per share in the first quarter of 2012.