My latest column is up at RealMoney.

Shares of Church & Dwight (CHD) fell sharply last week following a downgrade by BMO Capital Markets analyst Connie Maneaty. I think the lower price could be a buying opportunity in a name that may be a relatively safe haven in the current economic environment.

The company’s brands like Arm&Hammer could do particularly well in a recession, perhaps enticing more budget-conscious consumers. While shoppers may use less OxiClean laundry additive, I don’t see them cutting back on such necessities as Arid antiperspirant, Pepsodent toothpaste, Answer pregnancy tests or Trojan condoms.

Maneaty’s concern also did not appear to be so much about demand, as about costs. “If inflation increases 50% in 2009, we figure Church & Dwight will need offsetting price increases of close to 6 percent, twice the industry average, three times what it should realize this year, and more than it has realized in the past.”

I’m not exactly sure why, if inflation rises 50% in 2009, the industry wouldn’t just implement higher price increases. I mean, if I can get used to $4 gas, I can probably handle paying $0.95 for 16 ounces of baking soda rather than the current $0.89.

Over the last 12 months, Church & Dwight has generated free cash flow (cash flow from operations less capital expenditures) of $237 million — good for a 6.7% free cash flow yield on a current market capitalization of $3.55 billion. I think that yield is reasonable given the company’s expected growth.

If the company maintains a 6.7% free cash flow yield, and free cash flow increases in line with the most pessimistic earnings estimates, the shares could trade at $65 in the next year or so. That would be a 22% increase from the current level. Alternatively, $65 would also be 21 times the lowest estimate of 2009 earnings. Given that Church has traded at an average P/E of 21 times over the last five years, the target also looks reasonable from that perspective.

Disclosure: At time of publication, William Trent has no financial position in the companies mentioned in this article.

My latest column is up at RealMoney.

In summary, I think Colgate (CL) looks good relative to its peers on the basis of cash flow, earnings quality and estimate revisions.

Downside from current stock levels seems fairly limited. Colgate’s earnings are expected to reach $3.81 this year and $4.27 next year, assuming that no further positive revisions are in the cards. The lowest trailing P/E ratio over the last five years has been 18 times, so even if valuations sink to those levels, the company could grow into its current share price.

Better yet, if the stock can maintain its current P/E ratio, it could reach $100 in the next 12 to 18 months, for a 28% gain from current levels.

It doesn’t quite amount to one of Cramer’s $80-to-$120 plays, but in today’s market environment, slow and steady may well win the race.

Disclosure: At time of publication, William Trent has no financial position in the companies mentioned.