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

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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.

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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.

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