CLX and CHD Stocks Are Outperforming Peers, and Here’s Why



Better outlook driving stock price higher

The shares of Clorox (CLX) and Church & Dwight (CHD) have outperformed peers after reporting their most recent quarterly results. As the graph below shows, the share prices of these two companies have generated superior returns, with better-than-expected quarterly performance, industry-leading sales growth, and upbeat outlook driving gains.

Notably, these gains come at a time when the consumer product companies are reeling under pressure from slowing category growth in the US.

Article continues below advertisement

Stock performance post earnings

Despite the slowdown, Clorox and Church & Dwight have managed to drive strong sales, which have led their stock values to rise 5% and 9%, respectively, as of June 9, 2017. Procter and Gamble (PG) and Kimberly-Clark (KMB) have seen their stock values fall 2% and 1%, respectively, over a comparable period, as moderating category growth and increased competition have taken tolls on their financials.

By comparison, Colgate-Palmolive’s (CL) stock rose more than 3%, despite its soft 1Q17 results on rumors that the consumer product company would be up for sale.

On a YTD (year-to-date) basis, almost all of our select consumer product companies have outperformed the broader index, except for Procter & Gamble. CLX, CHD, CL, PG and KMB stock have generated returns of 14%, 20%, 16%, 5% and 13%, respectively, as of June 9, 2017. The Consumer Staples Select Sector SPDR ETF (XLP) has gained ~10%, while the S&P 500 Index (SPX) has risen ~9% since the start of 2017.

Series overview

In this series, we’ll compare the latest performances of Clorox and Church & Dwight with those of their peer group. We’ll look at the sales, profitability, and outlook and end with a discussion of current valuations and analyst ratings.


More From Market Realist