Clorox Investment Analysis


I will be able to make a new investment at the beginning of February, so over the next few days I will be analyzing a few stocks I have my eye on for this investment. It’s important to do proper research and analysis before you commit to buying a stock. All valuation metrics will be at the time of writing, so they may no longer be entirely accurate by the time you read this.

The first of the stocks I’ve wanted to take a position in is The Clorox Co. (CLX)

The Clorox Company (Clorox) is a manufacturer and marketer of consumer and professional products. It’s products are sold by merchandisers, grocery stores, other retail outlets, distributors and medical supply providers. The company owns brands that you will most likely see in every household such as Pine-Sol cleaners, Fresh Step cat litter, Glad bags, Kingsford charcoal, Hidden Valley and K C Masterpiece dressings and sauces, Brita water filters, and even Burt’s Bees Wax. I was personally surprised to see this much variety from the company, but that kind of diversification is great to see as an investor.

Clorox has raised its dividend every year for 36 years, making it a Dividend Aristocrat. Over the past 10 years, the company has increased its dividend payment by an average of 10.94%. So in terms of growth, it meets all of my criteria.

The dividend Yield for Clorox is fantastic at 3.16%. I typically aim for at least 2%, so Clorox definitely wins here. If you had invested $1000 in CLX 10 years ago and reinvested all dividends, you would now have about 37.16 shares worth $3336.22 paying out $100.33 dividends each year. So after 10 years, the dividend yield on cost is about 10%.

Clorox’s Earnings Per Share (EPS) is $4.34. So, with an annual dividend payout of $2.84, it’s Payout Ratio is 65.4%, which is just barely over my cut off criteria. Additionally, the Price to Earnings (P/E) Ratio is 20.69. For my investments, I like to make my entry when a stock’s P/E Ratio is below 20.

While I love the dividend yield and growth for this company, I think there may be better values to find in the market. Stay tuned for the other stocks I’m looking at.

How about you? Is Clorox on your radar? What other stocks are you watching?

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