The Clorox Company (CLX) is a leading manufacturer and marketer of consumer products which generated fiscal-year 2012 revenues of $5.5 billion. With 8,400 employees worldwide, the company manufactures products in more than two dozen countries and markets them in more than 100 countries.
In the last 8 years, the company has repurchased almost 40% of its outstanding shares.
The company has paid dividends since 1968 ... for 44 years. Most significantly, the company has increased its dividend for 35 consecutive years. This is a record not matched by many. According to Forbes, Clorox is one of 51 companies in the S&P 500 universe that has increased dividends for at least 25 years in a row, making it a member of the rather exclusive 'Dividend Aristocrat' club. The company boasts a 5-year dividend growth rate of 13.9%
- Clorox will celebrate its 100th Anniversary next May (2013). Expect significant marketing and promotion around this event, which will increase consumer awareness and should move the needle in terms of brand recognition and market share.
- New Product and strategic acquisitions such as the successful FY2012 acquisition of Aplicare, Inc., a leader in infection prevention products for the skin, and HealthLink, which bundles a range of products for individual physicians, doctors' offices, outpatient care centers and other small healthcare facilities, giving Clorox access to an expanded sales channel. The combination of these businesses, along with its acquisition of Caltech in FY2010, has accelerated sales growth in Professional Products Division (Healthcare) and provides a platform for long-term future growth.
- Increased International Focus - International sales account for 22% of the company revenue. The largest international region is Latin America. There is significant head room for international growth.
- Flu Season - It is a fact of life that the flu season is good for Clorox which commands an ever increasing presence in the home when fighting germs becomes top of mind.
- Pricing Power - The company has been able to successfully raise prices on almost 70% of its product portfolio over the past three years, even in this difficult, competitive business climate.
The Clorox Brands
Known for its namesake bleach, Clorox maintains a huge portfolio of well known brands, most of which command the number one or two position in their category. These so called 'Power Brands' represent 90% of the Clorox portfolio.
These include Clorox branded bleach and cleaners, 409 cleaner, Tilex shower cleaner, Pine-Sol cleaners, Liquid Plumber, SOS pads and cleaners, Glad bags and containers, Hidden Valley dressings, Kingsford charcoal, Brita water filtration, Fresh Step cat litter, plus brands that are recognized and only sold internationally.
Stock price and results
Current price (close on October 25, 2012) is $72.81 with an annual dividend yield of 3.5%. The 52-week change is 7.9%, which is LESS than the S&P500 change of 9.67%. In FY2012 the company achieved 5% sales revenue growth.
Diluted net earnings per share:
Clorox is a solid and growing company and commands an increasing presence on retailer's shelves across the United States and in over 100 countries around the world. As a retiree counting on dividend income, this is an important part of my overall portfolio and an appropriate selection for others building a dividend income stream. The 35-year track record of consistently increasing dividends is likely to continue. Plus, I am encouraged about the promotional opportunities the Clorox 100 year anniversary will bring in 2013 as the company continues to build brand loyalty into the future.