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 2018, CLX has rewarded shareholders with a 14.29% dividend increase of $0.12 per share, bringing their quarterly dividend to $0.96 from the previous $0.84. This increase blows past my expectations for the year of a $0.03 increase. The current dividend yield stands at 2.60% based on the $129.08 price.  The company citing the tax reform as the main driver for the significant increase and also announcing it earlier than normal.

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 9.14%. The dividend has grown 255% 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 30% over the last decade.

CLX Key Stats:

Market Cap: $16.72 Billion

Dividend Yield: 2.60%

PE Ratio: 21.31

Total Cash: $489 Million

Total Debt: $2.28 Billion

Profit Margin: 13.21%

Payout Ratio: 54.04%

Beta: 0.19

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 (I am long CLX).  It’s kind of in hold territory. 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 2019. 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.

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