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The Pros And Cons Of Buying Clorox Now

Jul. 04, 2022 7:58 AM ETThe Clorox Company (CLX)4 Comments
Bela Lakos profile picture
Bela Lakos


  • Clorox has a strong track record of outperforming the broader market in the last 30 years during times of low consumer confidence.
  • Margins have substantially contracted in the first quarter, driven by higher logistics and manufacturing costs and elevated commodity prices.
  • The declining margins have materially impacted the earnings causing the price multiples to expand.
  • CLX currently has a dividend payout ratio of more than 100%. This makes us question the safety and sustainability of the dividend payments in the near term.
  • Currently we rate the stock as "hold".

Woman choosing domestic cleaning product by the supermarket shelf

zoranm/E+ via Getty Images

Clorox's (NYSE:CLX) stock price has declined by about 17% year to date, slightly outperforming the overall market, which has declined by almost 20%.

Although CLX's stock has a strong track record of

This article was written by

Bela Lakos profile picture
Petroleum engineer with an enthusiasm for investing, accounting and personal finances.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Past performance is not an indicator of future performance. This post is illustrative and educational and is not a specific offer of products or services or financial advice. Information in this article is not an offer to buy or sell, or a solicitation of any offer to buy or sell the securities mentioned herein. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. Expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. This article has been co-authored by Mark Lakos.

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Comments (4)

Also concerned about the dividend payout ratio >100%.
CLX has increased their dividend for 20 years and historically has announced the 3rd quarter dividend in mid May (when the annual dividend has been raised). Still awaiting this announcement.
Is this possibly a clue to a dividend cut or no raise ?
Any thoughts ?
ferjen profile picture
@benelli05 that’s what I’m wondering…where’s the damn raise?
After your discussion of declining margins, overvaluation compared to its peers and dividend payout ratio >100% you still rate CLX a hold?
I have never been enthusiastic about CLX in comparison with other HP staples names, and in the last two years it has had a steadily downward chart.
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