The Clorox Company
) hit an all-time high of $88.63 on Thursday, Mar 28, before
closing at $88.53. This Zacks Rank #2 (Buy) global consumer
product company beat its previous 52-week high of $87.59 and
generated a whopping return of approximately 21.9% since Dec 31,
2012. Average volume of shares traded over the last 3 months came
in at approximately 884K.
An impressive record of beating the quarterly earnings
expectations, revenue growth, a positive fiscal 2013 outlook,
solid cash flows and a decent dividend yield enabled the shares
of Clorox to reach a new high. Moreover, Clorox currently trades
at a forward P/E of 20.43x, higher than the industry average of
With respect to earnings surprise, Clorox has been beating the
Zacks Consensus Estimate for the last 9 quarters. In the last
reported quarter, the company's earnings beat the Zacks Consensus
Estimate by 11.1%.
Further, Clorox posted impressive earnings and sales
comparisons for the second quarter of fiscal 2013. The company's
adjusted earnings of 90 cents per share jumped approximately
13.9% from the year-ago quarter's earnings of 79 cents and beat
the Zacks Consensus Estimate of 81 cents.
The company's earnings benefited from improvements in revenues
as well as gross margins, offset by higher selling and
administration expenses as it continues to invest in information
technology (IT) systems.
Net sales elevated 8.5% year over year to $1,325 million from
$1,221 million in the year-ago quarter, mainly due to improved
prices and volumes. Moreover, total revenue came in ahead of the
Zacks Consensus Estimate of $1,270 million. Total volume
increased 5% from the comparable quarter last year.
Expecting better category-wise performances, market share
gains and further product innovation across its brands, Clorox
raised its sales growth forecast to 3%-5% for fiscal 2013 from
2%-4% projected earlier.
In fiscal 2013, the company expects operating income margin to
expand 25-50 basis points (bps) on the back of efficient cost
savings, the benefit of price increases and flat commodity cost
forecasts. Further, Clorox raised its fiscal 2013 earnings
guidance range to $4.25-$4.35 per share from the previous range
Clorox is known for its shareholder-friendly moves. Since
1983, the company has increased its dividend from 1.875 cents to
64 cents. This currently yields a solid 2.9%, while the company
has a payout ratio of 58%. We believe that its continuous
dividend payments and increments reflect the growth potential of
its earnings and cash flow generation capabilities.
Apart from Clorox, other consumer products companies like
Church & Dwight Co. Inc.
Procter & Gamble Company
) focus on improving shareholder value by paying regular
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