Opinions Bruce Murray
Clorox CompanyCLXCOMMENTSep 20, 2017
Stock price when the opinion was issued
As of Jun 10, 2026. Market Open.
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She bought it because it trades at 16x vs. historically 18-20x, and pays a safe 4.9% dividend which has increased for 24 years in company history. Rocked by Covid, only now are earnings are finding a consistent trajectory of 6-8% earnings growth with dividend growth. From Jan.1 to Feb. 9, shares jumped 26%, but shares fell when the Iran war began, because many of their products rely on oil. Whenever the oil price goes down, these shares go up. Also, it's AI proof.
It reports Monday. It's down over 30% this year. It's at the heart of this market's conundrum. When there were worries over the economy, everybody bought the consumer packaged goods stocks. Now, perhaps because of inflation, people won't pay up for the name brands. See what the CEO has to say.
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This is a part of the whole consumers package goods business that is under incredible pressure from commoditization. The stock has done very, very well. It had high PEs just because of the quality of their cash flow and that their brand names are recognized. Now that we are getting into higher interest rates, that is going to start to get squeezed. Maybe the weakening of the US$ will allow some foreign profits to come through a little better, but generally the group is under a lot of pressure from generics, etc. If you own it, you are not going to lose a lot of money.