April 12, 2025 a 03:31 pm
CLX: Dividend Analysis - The Clorox Company
The Clorox Company demonstrates a robust commitment to dividends, supported by a long history of consistency. The company's dividend yield of 3.45% and 44 years of uninterrupted payments make it attractive to income-focused investors. However, its payout ratio of over 100% relative to both EPS and free cash flow suggests some sustainability concerns. Let's delve further into the specifics of Clorox's dividend profile to understand its overall appeal.
📊 Overview
Clorox operates within the consumer goods sector, known for generating stable cash flows. The company's current dividend yield stands at 3.45%, with a dividend of $4.79 per share. Despite recent pressures, Clorox has maintained dividends for 44 years without any cuts or suspensions.
| Detail | Value |
|---|---|
| Sector | Consumer Goods |
| Dividend yield | 3.45% |
| Current dividend per share | $4.79 |
| Dividend history | 44 years |
| Last cut or suspension | None |
🗣️ Dividend History
Clorox's dividend history is a testament to its resilience, maintaining and increasing dividends over 44 years. This consistency is crucial for long-term investors seeking reliability in returns.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | $2.44 |
| 2024 | $4.86 |
| 2023 | $4.76 |
| 2022 | $4.68 |
| 2021 | $4.54 |
📈 Dividend Growth
Understanding dividend growth rates is essential to project future income potential. Clorox's growth indicators suggest a modest, yet stable increase over time.
| Time | Growth |
|---|---|
| 3 years | 2.30% |
| 5 years | 3.77% |
The average dividend growth is 3.77% over 5 years. This shows moderate but steady dividend growth.
📉 Payout Ratio
Payout ratios provide insight into the sustainability of a company’s dividends. Clorox's payout ratios are high, suggesting aggressive distribution relative to its earnings and cash flow.
| Key Figure | Ratio |
|---|---|
| EPS-based | 129.77% |
| Free cash flow-based | 84.93% |
The high EPS payout ratio of 129.77% indicates the dividend payments exceed earnings, which could pose a risk if not supported by strong cash flow management.
✅ Cashflow & Capital Efficiency
Evaluation of cash flow metrics and capital efficiency helps understand Clorox’s financial robustness and capacity to maintain dividends.
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| Free Cash Flow Yield | 2.90% | 4.73% | 3.08% |
| Earnings Yield | 1.68% | 0.76% | 2.66% |
| CAPEX to Operating Cash Flow | 30.50% | 19.69% | 31.93% |
| Stock-based Compensation to Revenue | 1.18% | 0.99% | 0.73% |
| Free Cash Flow / Operating Cash Flow Ratio | 69.50% | 80.31% | 68.07% |
The metrics indicate stable cash flows, though the increase in CAPEX to cash flow ratios calls for strategic capital allocation reviews.
⚠️ Balance Sheet & Leverage Analysis
Analyzing leverage ratios reveals Clorox's financial stability and debt management capability.
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| Debt-to-Equity | 8.85 | 13.29 | 5.58 |
| Debt-to-Assets | 50.48% | 49.18% | 50.39% |
| Debt-to-Capital | 89.85% | 93.00% | 84.80% |
| Net Debt to EBITDA | 3.67 | 4.43 | 3.15 |
| Current Ratio | 1.03 | 0.95 | 0.97 |
| Quick Ratio | 0.63 | 0.59 | 0.54 |
| Financial Leverage | 17.53 | 27.02 | 11.08 |
Clorox's high leverage, notably a debt-equity ratio over 8, suggests potential risk, managed by steady operations and cash flows.
🚀 Fundamental Strength & Profitability
Assessing key profitability ratios provides insight into operational efficiency and margin strength.
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| Return on Equity | 85.37% | 67.73% | 83.09% |
| Return on Assets | 4.87% | 2.51% | 7.50% |
| Net Margin | 3.95% | 2.02% | 6.50% |
| EBIT Margin | 6.88% | 4.44% | 10.03% |
| EBITDA Margin | 10.38% | 7.81% | 13.06% |
| Gross Margin | 42.97% | 39.36% | 35.81% |
| Research & Development to Revenue | 1.78% | 1.87% | 1.86% |
Clorox's high return on equity highlights superior profit generation, though volatility in net margins suggests cost management challenges.
📸 Price Development
🔍 Dividend Scoring System
Analyzing Clorox across multiple dividend-related criteria offers a holistic view of its investment appeal.
| Category | Score | |
|---|---|---|
| Dividend Yield | 3 | |
| Dividend Stability | 5 | |
| Dividend Growth | 3 | |
| Payout Ratio | 2 | |
| Financial Stability | 2 | |
| Dividend Continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 3 |
Total Score: 27/40
🌟 Rating
The Clorox Company's dividend strategy is well-suited for income investors focused on long-term reliability, despite concerns of high payout ratios and leverage. Continued monitoring of cash flows and profitability will be essential for maintaining dividend health.