Covid-19 has made the investment landscape forbidding and uncertain. Many industries are facing major disruptions and slowdowns, and others are seeing record numbers due to the way we now live under the pandemic. Stay-at-home orders have sent revenues soaring for e-commerce and video conferencing. Gaming and entertainment services have seen demand rise significantly, as have cleaning stocks and companies that make outdoor equipment, especially bicycles.
Some of these trends may or may not continue, but no matter what happens in the coming months, one industry is almost certain to remain strong, given the need. There will continue to be high demand for cleaning and sterilization products, and investors will find many opportunities in those cleaning stocks.
Retailers are finally restocking shelves with toilet paper and consumer-grade cleaning supplies after months of shortages because of panic buying in March and April. Companies that manufacture these products are sure to do well, as are businesses that make industrial cleaners for grocery stores, processing plants, factories and other essential businesses.
Below, we’ll look at four stocks to consider in this area.
- Kimberley-Clark Corporation (NASDAQ:KMB)
- Clorox (NASDAQ:CLX)
- Ecolab (NASDAQ:ECL)
- W.W. Grainger, Inc. (NASDAQ:GWW)
Let’s look closer at what makes these cleaning stocks interesting.
Cleaning Stocks: Kimberley-Clark Corporation (KMB)
Kimberley-Clark manufactures personal care products under several brand names, including Kleenex, Scott, Kimtech, KleenGuard, and WypAll. Not only do these staple products never go out of style, but consumers will likely purchase more than usual in months to come — though hopefully not at the levels seen earlier this year, when shelves went bare.
Even so, this 148-year-old stock also encompasses K-C Professional, which sells products like wipes, sanitizers and soaps for businesses and workplaces. Now rated as a hold by analysts, KMB seems well-positioned to perform well, with a current price of $147.17 and forecast high of $165 in the next 12 months.
KMB offers a 3% dividend yield and has traded almost 30% higher since early March lows.
Clorox, the well-known household brand name, makes products that are always in demand, and CLX stock has been a slow but steady investment for many years. As consumers and businesses adopt more thorough cleaning and disinfecting routines, Clorox products promise strong performance. Those products include not only bleach but also cleaning sprays and wipes that have, until recently, been out of stock in stores because of buying sprees.
In addition to its cleaning supplies, Clorox also makes common household brands like Kingsford Charcoal, Liquid Plumr and Fresh Step kitty litter.
The breadth of popular consumer goods in Clorox’s wheelhouse make it a safe stock to consider in the best of times. CLX stock issues a 2.4% dividend and has gained almost 50% year to date.
Ecolab products are recognizable to anyone who has worked in the food service industry. Found in restaurant kitchens and hospital and corporate dining rooms, the cleaning supplies made by Ecolab are being called back into service as restaurants reopen.
While Covid-19 makes ECL a very good buy right now, this stock performs well most times, apart from an expected dip in April after lockdowns began. Since then, ECL has steadily climbed to a 12-month high, before dipping again in mid-June.
While some believe the cleaning stock is overvalued, it is still worth a close watch. Operating under Ecolab, Inc. are also segments such as Global Industrial, which offers water treatment and cleaning and sanitizing solutions for industrial customers.
Most analysts currently rate the stock a hold, but these specialized cleaning products could make ECL an especially timely buy in the near future given the sanitation protocols businesses, schools, and other facilities will need to adopt in the long term.
W.W. Grainger (GWW)
W.W. Grainger may not be a household name, but this stock may be one of the most interesting on the list. Founded in 1927, the W.W. Grainger company makes and distributes industrial maintenance, repair and operating (MRO) supplies for hospitals, long-term care facilities and relief organizations like the Federal Emergency Management Agency (FEMA) and the Red Cross. These include surgical masks and PPE as well as safety products, tools, and plumbing and lighting fixtures.
The company’s business-to-business model operates in the U.S., Canada, and internationally through approximately 600 brick-and-mortar branches and several online channels. W.W. Grainger has bounced back from a low in April and is currently rated as a “moderate buy” by Tipranks.
GWW could see a spike in earnings if hospitalizations increase, and its products will likely continue to be in high demand during the spread of the spread of the coronavirus.
As of this writing, Jody Bennett did not hold a position in any of the aforementioned securities.