The Procter & Gamble Company (PG), Unilever plc (ADR) (UL), Church & Dwight Co., Inc. (CHD): Building a Watch List From Household Items

For the foreseeable future, growth for Unilever plc (ADR) (NYSE:UL) will also come mostly from emerging markets. The company faces market saturation in developed nations.

Here comes the hammer

Church & Dwight Co., Inc. (NYSE:CHD) owns the Arm & Hammer brand. It also makes other essential products such as birth control, pregnancy tests, and Orajel pain relief. People need these products and many buy them from Church & Dwight Co., Inc. (NYSE:CHD).

Church & Dwight Co., Inc. (NYSE:CHD) blew it out of the water with revenue and free cash flow growing 32% and 125%, respectively, over the past five years. Its stock price returned 133% to its shareholders, not including dividends, beating the S&P 500 by eight times.

In the most recent quarter Church & Dwight Co., Inc. (NYSE:CHD) grew its revenue 13%. Free cash flow declined 37% due to a tax payment delayed until this quarter. Interestingly, domestic consumer sales grew the most driven by increased sales in detergent, birth control and pregnancy tests.

Even with the lower cash flow, Church & Dwight Co., Inc. (NYSE:CHD)’s dividend payment amounted to less than 62% of free cash flow. As of this writing, the company pays $1.12 per share per year in dividend payments equating to a 1.8% annual yield.

This company’s small size and narrow range of products makes it more nimble. Product innovation will serve as a catalyst for future growth.

Conclusion

These companies make needed products with beloved brand names indicating that you shouldn’t need to worry about obsolescence. They will make a worthy addition to your Motley Fool Watch List.

The article Building a Watch List From Household Items originally appeared on Fool.com and is written by William Bias.

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