#13 Stock Watchlist - 1/2024
Valuation Update for Procter & Gamble, Unilever, Church & Dwight and Colgate-Palmolive
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In the fast-paced world of investing, where trends and fads come and go quickly, there is an undeniable appeal to high-quality companies. These stocks may not make flashy headlines with dramatic price swings, but they serve as the reliable foundation of many successful investment portfolios. Notable among these are Procter & Gamble PG 0.00%↑ , Church & Dwight CHD 0.00%↑ , Colgate-Palmolive CL 0.00%↑ , and Unilever $ULVR. These companies are known for their stability, reliability, and consistent performance.
In this Stock Watchlist update, we provide fair value assessments of these fundamentally robust stocks. The rationale behind this is to demonstrate that true investment wisdom transcends the frenzy of chasing fleeting market sensations. Valuing the inherent worth of a stock, particularly those that offer stable returns, is crucial.
Procter & Gamble, Church & Dwight, Colgate-Palmolive, and Unilever may not appeal to speculative traders, but they possess qualities that are more valuable in the long run: steadfast reliability and resilience. These corporations have demonstrated long-term success, as evidenced by their stock valuations. They offer a balance of consistent performance and promising future prospects, making them attractive to investors seeking sustainable growth and stability rather than volatile short-term profits. These stocks are essential components of a diversified portfolio for discerning investors.
It is important to remember that successful investing is not just about buying stocks; it's about making smart purchases at reasonable valuations. Therefore, staying informed and understanding the fair value estimations of even the less glamorous stocks is a key aspect of informed investment decisions.
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Disclaimer: Please see details below, no investing advice, just my personal opinion. I am invested in P&G and Unilever.
Procter & Gamble
Procter & Gamble, a global provider of consumer packaged goods, operates through five main segments:
Beauty: This segment includes hair care products like shampoos and conditioners under brands such as Head & Shoulders, Herbal Essences, Pantene, and Rejoice. It also offers skin care, antiperspirants, and deodorants under brands like Olay, Old Spice, Safeguard, Secret, and SK-II.
Grooming: Here, Procter & Gamble provides shaving products and appliances under the Braun, Gillette, and Venus brands.
Health Care: This includes oral care products like toothbrushes and toothpastes under Crest and Oral-B. It also offers personal health products such as gastrointestinal treatments, vitamins, and pain relievers under brands like Metamucil, Neurobion, Pepto-Bismol, and Vicks.
Fabric & Home Care: This segment covers laundry and cleaning products. Brands include Ariel, Downy, Gain, and Tide for laundry, and Cascade, Dawn, Fairy, Febreze, Mr. Clean, and Swiffer for home care.
Baby, Feminine & Family Care: Offers baby care products under Luvs and Pampers, feminine care products under Always and Tampax, and family care products like Bounty, Charmin, and Puffs.
Procter & Gamble's products are sold worldwide, primarily through various retailers such as mass merchandisers, grocery stores, drug stores, and online platforms, as well as directly to consumers. The company, founded in 1837, has its headquarters in Cincinnati, Ohio.
Key Figures
Valuation and my Investment Thesis:
DCF Fair Value: $ 134
Current price: $ 148
P&G represents a stable investment opportunity due to its diversified product portfolio and strong brand recognition, which ensure consistent consumer demand. The company's focus on innovation and sustainability, coupled with its strategic pricing and cost management, positions it well for long-term growth in a competitive consumer goods market. Additionally, P&G's consistent dividend payments and shareholder return strategies make it an attractive option for income-focused investors. But the stock seems to be overvalued at the moment.
Unilever
Unilever PLC is a major player in the fast-moving consumer goods industry, operating across various segments:
Beauty & Wellbeing: This segment focuses on hair care products like shampoos, conditioners, and styling products, skin care items such as moisturizers, and includes prestige beauty, health, and wellbeing products with vitamins, minerals, and supplements.
Personal Care: In this segment, Unilever offers skin cleansing products (including soaps and shower items), deodorants, and oral care products like toothpaste, toothbrushes, and mouthwashes.
Home Care: This includes products for fabric care (washing powders and liquids, rinse conditioners), and home and hygiene, encompassing fabric enhancers and products for water and air wellness.
Nutrition: This segment covers cooking aids (soups, bouillons, seasonings), dressings (mayonnaise, ketchup), beverages, and functional nutrition products including brands like Horlicks and Boost, along with tea products.
Ice Cream: Offers a range of ice cream products for both in-home and out-of-home consumption.
Unilever's diverse brand portfolio includes well-known names such as AXE, Bango, Ben & Jerry’s, Cif, Comfort, Domestos, Dove, Equilibra, Hellmann’s, Knorr, LUX, Lifebuoy, Liquid I.V., Love Beauty & Planet, Magnum, OLLY, OMO, Onnit, Rexona, Seventh Generation, SmartPants, Sunsilk, The Vegetarian Butcher, Vaseline, and Wall’s. Founded in 1860, Unilever has its headquarters in London, United Kingdom.
Key Figures
Valuation and my Investment Thesis:
DCF Fair Value: GBP 52
Current price: GBP 38,55
Unilever is a interesting investment choice due to its wide range of leading brands, which gives it a significant competitive advantage in the fast-moving consumer goods sector. The company's commitment to sustainability and ethical practices aligns with the increasing consumer demand for eco-friendly and socially responsible products, which could drive long-term growth. Unilever's global presence and innovative approach to product development and marketing make it well-positioned to take advantage of emerging market opportunities and consumer trends. The stock appears to be slightly undervalued, providing a margin of safety of approximately 135% (52/39).
Colgate-Palmolive
Colgate-Palmolive is a global manufacturer and seller of consumer products, operating mainly in two segments:
Oral, Personal and Home Care: This segment encompasses a wide range of products including toothpaste, toothbrushes, mouthwash, bar and liquid hand soaps, shower gels, shampoos, conditioners, deodorants, antiperspirants, skin health products, dishwashing detergents, fabric conditioners, household cleaners, and more. Well-known brands in this segment include Colgate, Darlie, elmex, hello, meridol, Sorriso, Tom’s of Maine, Irish Spring, Palmolive, Protex, Sanex, Softsoap, Lady Speed Stick, Speed Stick, EltaMD, Filorga, PCA SKIN, Ajax, Axion, Fabuloso, Murphy, Suavitel, Soupline, and Cuddly. These products are marketed to a variety of retailers, wholesalers, and distributors, including traditional and eCommerce platforms. This segment also includes pharmaceutical products for dental and oral health professionals.
Pet Nutrition: This segment focuses on pet nutrition products, offering everyday nutritional needs under the Hill’s Science Diet brand, and a range of therapeutic products to manage disease conditions in dogs and cats under the Hill’s Prescription Diet brand. These products are marketed through pet supply retailers, veterinarians, and eCommerce retailers.
Founded in 1806, Colgate-Palmolive has its headquarters in New York, New York.
Key Figures
Valuation and my Investment Thesis:
DCF Fair Value: $ 80
Current price: $ 80
Colgate-Palmolive is a interesting investment choice because of its dominant market position in oral care and diverse product range that caters to essential consumer needs. The company's continuous innovation in product development, focus on eco-friendly practices, and strong global distribution network position it well for sustainable growth in the competitive consumer goods landscape. Colgate-Palmolive's consistent financial performance and commitment to shareholder returns, through dividends and share repurchases, make it an attractive option for long-term investors. In my opinion, the stock is fairly valued, but without any margin of safety.
Church & Dwight
Church & Dwight Co., Inc. is a company focused on developing, manufacturing, and marketing a wide range of household, personal care, and specialty products, operating across three primary segments:
Consumer Domestic: This segment offers a variety of products including cat litters, carpet deodorizers, laundry detergents, and baking soda-based products under the ARM & HAMMER brand. It also includes personal care items like condoms, lubricants, and vibrators under the TROJAN brand; stain removers and cleaning solutions under the OXICLEAN brand; toothbrushes under the SPINBRUSH brand; pregnancy and ovulation test kits under the FIRST RESPONSE brand; depilatories under the NAIR brand; and oral analgesics under the ORAJEL brand.
Consumer International: This segment focuses on the international distribution and sale of the company's consumer products, similar to those offered in the Consumer Domestic segment.
Specialty Products Division: In this division, the company provides animal productivity products like MEGALAC, BIO-CHLOR, FERMENTEN, and CELMANAX, as well as sodium bicarbonate and other cleaning and deodorizing products for industrial use.
Church & Dwight Co. also offers other consumer products such as laundry detergents under the XTRA brand, dietary supplements under the L’IL CRITTERS and VITAFUSION brands, dry shampoos under the BATISTE brand, water flossers and showerheads under the WATERPIK brand, cold relief products under the ZICAM brand, oral care products under the THERABREATH brand, and acne treatment products under the HERO brand.
The company's products are sold through various outlets including supermarkets, mass merchandisers, drugstores, convenience stores, home stores, discount stores, pet stores, specialty stores, and e-commerce channels. Founded in 1846, Church & Dwight Co. is headquartered in Ewing, New Jersey.
Key Figures
Valuation and my Investment Thesis:
DCF Fair Value: $ 72
Current price: $ 95
Church & Dwight presents a promising investment opportunity due to its robust collection of established household brands that are widely recognized, ensuring a consistent consumer demand. The company's strategic emphasis on innovation and sustainability, coupled with its ability to navigate market trends and consumer preferences, positions it for sustained growth. Furthermore, Church & Dwight's history of strategic acquisitions and efficient cost management highlights its potential for sustained profitability and value creation for shareholders in the ever-changing consumer goods industry. In my estimation, the stock is considerably overvalued.
Disclaimer: The information provided in this publication is for educational and informational purposes only and does not constitute financial advice. The content is solely reflective of my personal views and opinions based on my research and is not intended to be used as a basis for investment decisions. While every effort is made to ensure that the information is accurate and up-to-date, the writer makes no representations as to the accuracy, completeness, suitability, or validity of any information in this post and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. All readers are advised to conduct their own independent research or consult a professional financial advisor before making any investment decisions. The author is invested in P&G and Unilever.
Sehr interessant, Danke für dies gute Ausführung ! Grüße Susanne