Shares of consumer products maker Church & Dwight (CHD 1.11%) have fallen roughly 20% so far in 2022. That's one of its worst drawdowns since the turn of the century, though not the worst one in the company's history. When investors become this negative on a stock, it pays for long-term investors to get interested. But that doesn't mean the stock will end up being a buy. Let's find out.

The good news

From a business perspective, Church & Dwight has an impressive collection of consumer staple brands. This includes Arm & Hammer and various other products, from laundry detergent to kitty litter, OxiClean, Trojan, Nair, Arrid, and Water Pik, among many others. Some are leaders in their space, others are simply well-known brands. Good brands have material value as they tend to lead to loyal consumers and repeat sales. That's a big selling point with Church & Dwight's retailer customers. 

A person doing laundry.

Image source: Getty Images.

Another facet that's notable about Church & Dwight is that it has a history of innovation. The fact that it managed to take baking soda and successfully expand it into everything from toothpaste to kitty litter is the most prominent indication of its ability on this front. But the real takeaway is that consumers like "new" things, and innovative products help to draw more people to stores. That, again, makes the company's retailer customers happy. There's no sign that its innovation capabilities have been permanently impaired.

Meanwhile, the company has a long history of returning cash to investors via a growing dividend stream. It has increased the dividend annually for 26 consecutive years, making it a Dividend Aristocrat. And the payout ratio in the third quarter of 2022 was a very healthy 35%. In other words, there appears to be little risk of a dividend cut.

The bad news

There are very clear reasons to be fond of Church & Dwight. But it is facing difficult times like the rest of the consumer staples group -- thanks to fast-rising inflation and the potential for an economic downturn. The headwinds were on clear display in the third quarter. The company reported a same-store sales decline of 0.7% as price increases of 7.8% were more than offset by consumer purchase reductions of 8.5%.

Simply put, the company raised prices and shoppers switched to other brands. That's not a good trend, and it suggests Church & Dwight lacks pricing power at a time when some of its peers have been having better success at pushing through price hikes.

CHD Debt to Equity Ratio Chart

CHD Debt to Equity Ratio data by YCharts

On top of that, Church & Dwight doesn't have quite the same financial strength as some peers. Notably, industry bellwether Procter & Gamble has a debt-to-equity ratio of roughly 0.75, but covers its trailing 12-month interest expenses by nearly 50-fold. Church & Dwight's debt-to-equity ratio is just shy of 0.70, with trailing interest coverage of about 13.5. That's not bad by any stretch of the imagination, but conservative investors can collect a 2.4% dividend yield from P&G, while Church & Dwight only sports a 1.3% yield.

That brings up the key issue here. Church & Dwight is cheaper than it was at the start of 2022, but it doesn't exactly seem like a screaming buy. For starters, the yield is toward the lower end of the range over the past decade. And while it has never been a particularly high-yielding stock, that makes it hard to suggest that the stock is cheap. In fact, the price-to-earnings ratio is right in line with its five-year average. 

Probably wait

There's nothing wrong with buying a good company at a fair price, even if it is facing some near-term headwinds. That certainly could be your final call with Church & Dwight. However, for dividend investors, it really doesn't have much appeal over peers that operate just as strong, if not stronger, businesses and offer more generous yields, such as industry giant Procter & Gamble.