Dividend Increase: Clorox (CLX) 2017

Clorox makes bleach, cleaning chemicals, water filters, cat litter, charcoal, salad dressing, and all natural personal care products, to name a few of their top selling product lines. You may know Clorox for a lot of their products, but did you know they also have some funny commercials:

For 2017, CLX has rewarded shareholders with a 5% dividend increase of $0.04 per share, bringing their quarterly dividend to $0.84 from the previous $0.80.  This increase falls exactly in line with my expectations for the year.  The current dividend yield stands at 2.56% based on the $131.23 closing price.

Clorox Dividend History:

Looking at the above spreadsheet, we see that CLX has been increasing its dividend since 2005.  2004 saw a one year break snapping their streak.  Since 2003, CLX has increased its dividend on average 8.77%.  The dividend has grown 222% since 2003, not too shabby for a low profile company that typically doesn’t receive much press, unless flu season gets out of control.

CLX vs S&P500:

Clorox largely received no attention from Wall Street.  Years ago they had a market cap of just under $7Billion during the recession.  In 2009, Carl Icahn did investors a solid and did one of his fake buyout offers to drive the price up, so he could make a quick profit.  Thanks Carl, but you should have stayed long.  Since the takeover offer, CLX has been on fire, outperforming the S&P500 by 40% over the last decade.

CLX Key Stats:

Market Cap: $16.90 Billion

Dividend Yield: 2.56%

PE Ratio: 25.92

Total Cash: $431 Million

Total Debt: $2.44 Billion

Profit Margin: 11.22%

Payout Ratio: 62.52%

Beta: 0.23

In this rich market, I’m trying to find value.  PE multiples are high for a lot of companies, CLX included.  While the debt isn’t high per se, I’d like to see more of a cash cushion for lean times, so additional debt loads don’t have to be taken on.  Also paying down some debt would be nice.  Payout Ratio is manageable.

Conclusion:

I’d hold off on buying CLX right now.  As recently as 5-6 months ago, CLX was a buying opportunity in the 115 level.  I’d hold off for around those levels again.  I’m not in a rush to throw money into this market.  Whenever the dollar weakens, that should help earning for CLX.  I expect the dividend to grow around 4-5% in 2018.  CLX is quick to pullout of countries that are unprofitable due to high inflation and that is part of the reason they have outperformed their peers.

Follow me on the social medias:

Be the first to comment

Leave a comment

Your email address will not be published.


*


Follow me on the social medias: