You’ve got to give credit to Clorox (NYSE:CLX). This “boring” old dinosaur just keeps chugging higher, as CLX stock is on the cusp of making new highs.
In fact, anyone who has owned this one for a while has been incredibly happy. From the February high to the March low, shares sank less than 7%. That compares to a 35% peak-to-trough decline in the S&P 500.
In March — when the market was taking the brunt of the hit — CLX stock actually rallied. Admittedly, from closing high to closing low, Clorox did suffer a 16% decline in April. But that’s only after the stock went borderline parabolic, spiking more than 36% in just a few days.
Let’s take a closer look at this old stud.
Rain or Shine, Pandemic or Not
Pandemic or not, Clorox simply delivers. While not known for its robust growth, the company continues to deliver, just like a number of old-school brands. Colgate-Palmolive (NYSE:CL), Johnson & Johnson (NYSE:JNJ), McDonald’s (NYSE:MCD), Coca-Cola (NYSE:KO) — you name it.
In this instance, Clorox is getting a boost from the pandemic. Consumers were out hoarding at the grocery store, stocking up on wipes, detergents, food and other pantry items. Clorox wipes, bleach and other disinfectants were in demand. That was evident in the most recent quarter.
Sales jumped 15% year-over-year to $1.8 billion and still beat estimates by almost $100 million. For the full-year, analysts expect almost 6% revenue growth and 9% earnings. In-line results will net Clorox with earnings of $6.88 per share.
For now though, consensus expectations do not call for sales and profit to fall off next year even as we “return to normal.” Instead, analysts predict sales will grow another 1.2% alongside 3.6% earnings growth.
Again, it’s not Amazon-style growth, but Clorox is consistent.
The Clorox Dividend
Another thing that’s consistent? The dividend from CLX stock.
Clorox pays out a 2.2% dividend yield. It’s not a stunning yield, but at a time where the 10-year Treasury bond pays a yield of just 75 basis points and as many investors wonder whether negative rates are on the way, it’s certainly not bad income.
If investors are chasing yield, they can find it among plenty of dividend stocks — again, particularly with fixed income paying so little. But it will be hard to find a stock that has performed this well while the dividend has been this dependable over the years.
Clorox has not only paid, but it has raised its dividend each year for more than 30 years. It has now paid a dividend for more than five consecutive decades. It’s not necessarily in a class of its own, but it’s a yield we can clearly count on. The company most recently gave a 4.7% bump to its dividend payout too, raising it in May.
Trading CLX Stock
Last but certainly not least, CLX stock has excellent technicals. The explosive rally in mid-March really added a wave of volatility to Clorox.
Now though, the stock continues to grind higher, riding along the 50-day moving average as it puts in a series of higher lows. Shares are now breaking out over $210 resistance, with the next upside target being the March highs at $214.26.
Above that and shares can really get back into breakout mode. It’s not a guarantee that a breakout will happen, but even on a dip, the technicals will remain favorable for CLX stock. That is, until key support levels and trend lines began to break down.
No trend lasts forever and CLX stock won’t be the exception. But for the moment, bulls remain in control and with its other catalysts, I continue to like Clorox.
Matthew McCall left Wall Street to actually help investors — by getting them into the world’s biggest, most revolutionary trends BEFORE anyone else. The power of being “first” gave Matt’s readers the chance to bank +2,438% in Stamps.com (STMP), +1,523% in Ulta Beauty (ULTA) and +1,044% in Tesla (TSLA), just to name a few. Click here to see what Matt has up his sleeve now. Matt does not directly own the aforementioned securities.