Sturdy past performances and an impressive outlook facilitated the shares of The Clorox Company (CLX) to reach a new all-time high of $102.18 on Tuesday, Nov 4. This Zacks Rank #3 (Hold) global consumer product company eventually closed at its highest mark yesterday, representing a healthy year-to-date return of 14.3%. Average volume of shares traded over the last 3 months stands at over 1,091k.
An impressive record of beating the quarterly earnings expectations along with revenue growth, an optimistic fiscal 2015 outlook, solid cash flows and a decent dividend yield are the strengths that pushed the shares of Clorox to a new high. Moreover, Clorox currently trades at a forward P/E of 22.8x, almost in line with peer group average of 22.78x.
With respect to earnings surprise, Clorox has been beating the Zacks Consensus Estimate for the last three quarters. In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 6.8%.
Last week, Clorox posted impressive earnings and sales comparisons for the first quarter of fiscal 2015. The company’s adjusted earnings of $1.10 per share increased approximately 5% from the year-ago quarter and beat the Zacks Consensus Estimate of $1.03.
The year-over-year rise in earnings was mainly driven by cost savings, price increases and higher volumes, partially offset by unfavorable exchange rates, increased manufacturing and logistics expenses as well as investments made toward incremental demand-building.
Net sales inched up 1% year over year to $1,352 million from $1,343 million in the year-ago quarter, mainly driven by increased prices and higher volumes. On a currency neutral basis, revenue increased 3% in the quarter. Moreover, Clorox’s sales surpassed the Zacks Consensus Estimate of $1,330 million.
Expecting better category-wise performances, market share gains and further product innovation across its brands, Clorox has reaffirmed its sales growth and earnings forecast for fiscal 2015. On a currency neutral basis sales are expected to grow in the range of 1%–3% while earnings are projected to come between $4.35 and $4.50 per share.
Furthermore, Clorox is also known for its shareholder friendly moves. In Sep 2014, the company announced a quarterly dividend of 74 cents per share, payable on Nov 14, 2014 to shareholders of record as on Oct 29, 2014. This currently yields a solid 2.93% on an annualized basis, while the company has a payout ratio of 74%.
Since 1983, the company has increased its dividend from 1.875 cents to 74 cents. We believe that its continuous dividend payment and increments reflect its earnings growth potential and cash flow generation capabilities.
Beside Clorox, Leggett & Platt Inc. (LEG), Church & Dwight Co. Inc. (CHD) and Costco Wholesale Corp. (COST) have also hit new 52-Week High of $40.12, $73.62 and $136.72, respectively.
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