Earnings season is sometimes referred to as "corporate America's report card," but only a few sets of results may be indicative of how the overall economy is doing.
"There are a few companies [whose] earnings growth moves exactly the same as the S&P 500 earnings growth," said Erin Gibbs of the S&P Investment Advisory.
"One of them is AT&T, so no surprise, a big telecom. Another one is Scana, a big utility. And another one is Church & Dwight, which we don't normally talk about, it's a consumer staple. So it's basically your old-school utilities, telecom, consumer staples, they're telling you how the economy is going."
Gibbs emphasized New Jersey–based Church & Dwight in particular. The household product manufacturer, known for its Arm & Hammer and Trojan brands, has shown consistent and steady growth over the years.
"They have almost a one — a perfect beta — of earnings growth to the S&P 500's earnings growth. So if you want to know where we're going to end up, where the earnings are going to end up, look at Church & Dwight," Gibbs said.
The company has an interesting relationship with economic growth in that it has some business lines that benefit from economic strength, and others that are less impacted by the economic cycle.
"We have a portfolio that's going to perform well in any economy, 60 percent premium and 40 percent value," Church & Dwight CEO Matthew Farrell said in the company's February earnings call.
Church & Dwight is set to report its first-quarter earnings on May 5.
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Old-school companies like Church & Dwight are often overshadowed by flashier tech giants such as Amazon and Google. But despite the more staid names, they may say more about where America is heading.
"Old economy companies are in many ways [more of] a measurement of macro health than new economy companies, if for no other reason than simply, you know, Apple, Facebook, Google, are very labor light," said BK Asset Management's Boris Schlossberg. "So they could have huge impact on profits, but small sort of impact on the broad macro terms."
Schlossberg said crossovers do exist and those companies straddle both worlds, which has let them see somewhat slow, but steady, growth.
"I think one extreme crossover between the new economy and old economy is FedEx, and I think how FedEx goes in many ways, crosses the notion of where we are digitally and physically in the global economy and the U.S. economy," he said. "So that's probably another good tell-tale sign of where we're going."
