Opinions Gordon Reid
Clorox CompanyCLXDON'T BUYJul 12, 2023
Stock price when the opinion was issued
As of May 28, 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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Still really expensive at over 30x earnings for a consumer product. Not fantastic growth. Relatively weak balance sheet, lots of debt. Fairly well managed. Cost-cutting efforts can only go so far. Be careful.