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Edgewell Personal Care May Be Worth Watching... Eventually

William Bias profile picture
William Bias


  • Edgewell Personal Care got rid of its lighting and battery business to focus on the personal care segment.
  • The company possesses plenty of cash to pay down debt and market its products.
  • Edgewell Personal Care is undervalued on a forward basis.

Edgewell Personal Care (NYSE: NYSE:EPC) represents the personal products business of the old Energizer Holdings (NYSE: ENR). The "old" Energizer Holdings (now Edgewell Personal Care) decided to separate its household products business, which became the "new" Energizer Holdings. Given its focus on its personal care core competency, I think investors should take a hard look at Edgewell Personal Care after it gets past the pains stemming from the spin-off transition. Here's why.

A strong product portfolio

Edgewell Personal Care sells some well-known products under brand names such as Schick razors, Edge shaving cream, Banana Boat sun care, Playtex baby products and Wet Ones hand wipes. Companies that sell personal care products can make good investments. The repeatability of purchases by the final consumer, combined with small potential price increases can offer long-term fundamental expansion. People need personal care products to take care of themselves and their surroundings, fulfilling a need in society. Also, branding can add customer loyalty, assuming the product is of sound quality.

Plenty of cash on balance sheet

In the most recent quarter, Edgewell Personal Care's balance sheet indicated $1 billion in cash and equivalents. This represented an amazing 48% of stockholders' equity. If this cash balance holds up through the transition process, it will give the company plenty of money to fund the marketing of its product portfolio and to come up with new products and product enhancements.

It would also give the company better ability to support its dividend. Currently, the company pays shareholders $2 per share per year and yields 2.3%. Moreover, it would allow Edgewell Personal Care Products to pay down its long-term debt, which is a downer at 110% of stockholders' equity. I like to see companies with long-term debt-to-equity at 50% or less of stockholders' equity.

Company may get back on

This article was written by

William Bias profile picture
I have been analyzing stocks since 1992 and a freelance writer since 2012.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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