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Clorox Hits All-Time High As It Reports Earnings

By: Investor's Business Daily
Posted: 10/31/2013 6:19:00 PM
Referenced Stocks: CLX

Clorox ( CLX ) reported earnings Thursday that were slightly better than expected, but the stock was having trouble deciding what it wanted to do.

It dropped 1% near the open, reversed to a 2% gain and ended the day little changed -- at 90.19, up 0.05. Clorox hit an all-time high in morning trade as the stock broke out of a 27-week consolidation.

No matter. Clorox isn't the kind of stock where shareholders fret intraday moves as if it were a fast-moving Internet or biotech name. Investors tend to hold for the long term and for dividend income.

The company is a century old this year. It almost foundered until Annie Murray, an early shareholder, began giving away samples of bleach in her Oakland, Calif., grocery store.

Clorox is one of the ultimate defensive stocks. If the economy turns south, consumers may forgo another Michael Kors handbag, but they're going to keep buying the wide variety of household products Clorox produces, which include cleaning products, bags, wraps and containers, cat litter, sauces and personal care products.

Clorox is a slow but steady grower. Its five-year growth rate is just 3%, but its Earnings Stability Factor is 4 on a 0 to 99 scale, where low numbers correspond to steady growth.

It also has an Accumulation/Distribution Rating of B+, suggesting institutional buying.

Hence, the stock offers some chance of capital appreciation along with a growing dividend. It has a Relative Price Strength Rating of 54, which means it has slightly outperformed the S&P 500 over the past year.

The company boasts that it has grown the dividend each year since 1977. The quarterly dividend was 40 cents a share in the 2008 fiscal year ended in June and now is 71 cents. That translates to an annualized yield of 3.1%.

The earnings reported Thursday show EPS growth was 3% for the quarter while revenue grew 2%. Analysts are expecting 8% growth in 2014 and 7% in 2015.