Clorox Co (CLX) Stock: This Age-Old Pick Is Here to Stay

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You have to hand it to Clorox Co (NYSE:CLX). CLX made a viable global business and sold only one basic product — bleach — for more than 50 years of its existence.

Clorox Co (CLX) Stock: This Age-Old Pick Is Here to StayOf course, CLX is now 103 years old, so 50 years seems a lot different than if it were more than half the company’s existence. All the same, finding a way to make a major, profitable business out of bleach is pretty impressive.

And just after its 60th birthday, CLX began offering investors a dividend. It has grown that dividend every quarter now for more than 40 years, making it one of the most rarified Dividend Aristocrats in the market.

The Primary Strength of CLX

Since its expansion into other markets five decades ago, it has remained true to its consumer staples roots. Its current product line includes well-known brands across the aisles of every grocery store in America and beyond: Clorox, 409, Pine-Sol, SOS, Kingsford, Glad, Fresh Step, KC Masterpiece, Hidden Valley and Burt’s Bees, to name a few.

And these just aren’t any consumer staples brands. More than 80% of CLX products are either No. 1 or No. 2 in their product categories. That means, wherever you see a CLX brand in the store, it’s one of the top-selling brands in its category.

That kind of dominance takes a lot of effort. You have to convince consumers that there is value in paying a premium for a name brand. And, alternatively, you have to price it so that it’s a real option to a lower-priced competitor.

This is something CLX has done effectively in both good economic times and bad economic times for decades. Remember, Clorox started a couple of years after The New York Times came up with the logo “All the news that’s fit to print” and the U.S. government annexed Hawaii.

Another strength CLX has is the fact that its competitors Colgate-Palmolive Company (NYSE:CL) and Kimberly Clark Corp (NYSE:KMB) are 3 to 4x bigger than CLX. And much of CLX’s revenue is focused on the U.S. market. According to CSImarket.com, more than 80% of CLX revenue comes from the U.S. For KMB, almost half its revenue comes from offshore. Only 20% of CL revenues are derived from the U.S.

That is a key point when the U.S. dollar is the strongest currency in the world and the U.S. economy is improving at a slightly better rate than other nations.

First, it means U.S. consumers are more willing to buy the brands. Second, its overseas sales aren’t hurting its revenues when sales abroad are converted back to dollars.

Also, as these markets continue to flounder, investors look to the U.S. for solid alternatives to keep their money safe in tough economic times. And there are few places better than this Dividend Aristocrat.

Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.

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Article printed from InvestorPlace Media, https://investorplace.com/2016/07/clorox-stock-clx-age-old-stay/.

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