Only my editors might know how I’d answer this question but it’s been awhile since I’ve covered either Clorox Co (NYSE:CLX) or Church & Dwight Co. (NYSE:CHD) so before I decide if CLX stock is better than CHD stock or vice-versa, why don’t we have a look at each company’s strengths?

By the end, you’ll have an answer.

Interestingly, over the past five years, CLX stock’s grown by 58% while CHD is up 66%, a mere difference of 109 basis points on an annualized basis.

CLX Stock Strengths

Well, in this case, it’s clearly the original brand. Clorox is bleach but bleach isn’t Clorox.

Between Clorox, Pine-Sol and a small piece of the professional cleaning market, Clorox’s cleaning segment generates 34% of its annual revenue. I bet if you asked 10 people what Clorox Co. does, most would answer it makes bleach.

Interestingly, Pine-Sol, Glad and Kingsford charcoal all generated a greater percentage of its total revenue in 2017; Pine Sol’s the biggest revenue generator at 19%.

Perhaps it ought to be renamed Pine Sol Company?

Another interesting tidbit about Clorox — it was owned by Procter & Gamble Co (NYSE:PG) for 12 years between 1957-1969. In 1999, Clorox acquired the parent company of Glad garbage bags, providing it with an immediate 40% boost to the top line. Other acquisitions like Burt’s Bees since then have added to its roster of brands.

Long-term, its aim is to grow annual free-cash flow (FCF) by 11%-13% annually by bumping the EBIT margin by a minimum of 25 basis points a year.

It’s boring I’ll grant you. But consider what it would look like a decade from now if it achieves its growth objectives over the next five years.

Its current trailing 12 months FCF is $764 million. Extrapolate that over five years and we’re talking about approximately $1.35 billion. With a current enterprise value of $18.4 billion, it’s got a forward FCF yield of 7.3%, which approaches values territory.

If you’re a dividend-income investor, its 2.6% dividend yield is money in the bank. In March, it raised its dividend by 14%, the 41st consecutive year raising the annual payout.

Get paid to wait the five years.

CHD Stock Strengths

Church & Dwight doesn’t have nearly as recognizable a corporate name but you’ve likely heard of some of its brands: Arm & Hammer baking soda and laundry detergent; Trojan condoms; Oxi-Clean stain remover and detergent — the list goes on.

It generates more than 80% of its revenue and income from 11 power brands split almost evenly between household and personal care products.

It’s hard to get noticed when you’re the smallest of consumer products companies at $3.8 billion in annual sales. The next six largest, which includes Clorox, averages $28.8 billion in annual revenue.

How do you compete against the likes of P&G? Very carefully.

One way to do it is through acquisitions. Some companies say they’re good at integrating acquisitions but CHD really is. Since 2001, it has acquired 10 out of 11 of its power brands growing revenues from $1.5 billion to more than $4.0 billion in 2018.

Although it hasn’t been as busy in recent years — only one power brand, Waterpik, has been acquired in the past five years — it knows what it’s looking for and is ready to strike at any time.

It’s even growing online where sales from the internet represent 5% overall, up from 1% two years ago.

I see that as a big growth runway for Church & Dwight over the next five to 10 years, given it’s very popular on Amazon.

Lastly, it’s starting to really grow internationally with 2018 sales expected to account for more than 15% overall. That’s up from less than 5% two years ago.

In 2018, Church & Dwight expects to grow its adjusted earnings per share by at least 16% on higher organic sales combined with strong cost control. Over the past five years, it has averaged adjusted earnings-per-share growth of slightly less than 10%.

Equally important, it converts more of its income to free cash flow than all of its peers — including Clorox.

The Verdict

Of the two stocks, Church & Dwight is the more expensive by most valuation metrics.  That said, I’ve been a fan of CHD’s consistency over the years –it’s up 7.1% year-to-date through July 3 and has delivered positive calendar-year returns for shareholders every year this past decade — and I have no doubt it will continue to perform.

Sorry, CLX stock, but you’re not the better buy.

As of this writing Will Ashworth did not hold a position in any of the aforementioned securities.