Performance Comparison of Church & Dwight Company, Inc. (CHD) and Nike, Inc. (NKE)

The shares of Church & Dwight Company, Inc. (NYSE:CHD) and Nike, Inc. (NYSE:NKE) were among the active stocks of the last trading sessions. Church & Dwight Company, Inc. (NYSE:CHD) declined to -2.54% closing at the price of $64.43 whereas the shares of Nike, Inc. (NYSE:NKE) declined -0.24% with the decrease of -0.19 points closing at the price of $77.78. Church & Dwight Company, Inc. has currently increase 35.76% in its stock over the period of 6-months while its rival Nike, Inc. added 13.66% in the previous 6-months.

Now we have to analyze the facts that if the stocks were worthy off investors’ money? The facts to analyze here are risks, profitability, returns and price trends.

Returns and Profitability

Profitability and returns are the main reason of investment, the investors are looking for profits that they get and return they should expect over the period of time.

The first and foremost return that is considered while making an investment is the ROI or Return on Investment. The ROI is the ratio between the profit against the cost of investment. Currently the ROI of Church & Dwight Company, Inc. (NYSE:CHD) is 11.1% while the ROI of Nike, Inc. (NYSE:NKE) is 30%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, CHD’s EBITDA Margin is 17.72 whereas NKE’s is 21.26.

Both the profitability ratios suggest that Nike, Inc. (NYSE:NKE) is more suitable investment in terms of profitability and return.

EPS & Surprise Factor

Church & Dwight Company, Inc. (NYSE:CHD) reported $0.58/share EPS for the previous quarter where analysts were predicting an EPS to be $0.54/share Thus beating the analyst Estimates with a Surprise Factor of 7.4 Percent. While, Nike, Inc. (NYSE:NKE) reported EPS of $0.67/share in the last quarter. The analysts projected EPS of $0.63/share depicting a Surprise of 6.3 Percent.

Taking a look at Earnings per Share, Church & Dwight Company, Inc. tends to be beating the analyst estimates more than Nike, Inc.. so CHD is more profitable than NKE.

Technical Analysis of Church & Dwight Company, Inc. & Nike, Inc.

Moving average convergence divergence (MACD) shows that Church & Dwight Company, Inc. (NYSE:CHD) is on a PRICE RELATIVITY trend While Nike, Inc. (NYSE:NKE) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Church & Dwight Company, Inc. was in BULLISH territory and Nike, Inc. was in BULLISH territory.

CHD’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While NKE’s candle is NEUTRAL with HIGH.

EPS Growth Rate: CHD’s 10.59% versus NKE’s 14.06%

Another shareholder value can be analyzed through the EPS growth rate; the next 5 years EPS growth rate is predicted by the analysts after the analyzing the previous trends. The next 5 year EPS growth rate of Church & Dwight Company, Inc. (NYSE:CHD) is predicted at 10.59% while Nike, Inc. (NYSE:NKE) stands at 14.06%. These numbers suggest that NKE is more suitable investment in terms of EPS growth rate.

Financial Risk and Liquidity Concerns

The current ratio and the debt ratio are the two ratios that show the investor how quickly the company is able to payout its debt and how quickly it can cover its obligations. The current ratio of CHD stands at 0.9 while NKE is at 2.3 whereas the debt ratio of the prior is 0.89 while the debt ratio of the later is 0.39.

The values of the both ratios suggest that one is more liquid and other investment is more risk free.

Analyst Recommendations

While making an investment, another main factor to consider before investing is the analyst recommendation on the scale of 1 to 5 where 1 is strong buy, 2 is buy, 3 is hold, 4 is Sell and 5 is strong sell. Analyst recommend 2.8 for CHD and 2.2 for NKE which means CHD has Hold rating whereas NKE has Hold rating.

Another recommendation of analyst that is to be considered worthy is the price target. The mare price or price trend does not suggest the suitability of a stock. The price target set by analyst is also to be considered while investing as it suggests to what extent the stock will rise or fall in the near future. The price target set for CHD is $59.61 which is -8.09% of its current price while NKE has price target of 87.76 which is 11.37% of its current price.

Valuation Ratios

Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.

CHD currently has price to earning P/E ratio of 28.94 whereas NKE has 31 while the forward P/E ratio for the prior stands at 26.2 and for the later it depicts the value of 24.78.

The price to Book P/B for CHD is 6.73, Price to Sale is at 3.86 and for NKE these ratios stand at 13.79 and 3.32.