The Clorox Company (CLX) is an American producer of consumer and professional products founded in 1913 year. Split of sales and the most important brands (mainly with #1 or #2 market position) are presented below:

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Although products are relatively simple and can be replaced by private label products it is important to emphasize, that Clorox is absolutely No. 1 as it comes to market share – around 23%. The main advantages are economy of scale, big marketing budgets and competitive position in negotiations with retailers.

In the long term company should grow at around 3-5% annually.

Outlook for 2016 is rather weak, as sales is said to be flat.

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As it comes to financials (estimates):

Market cap ~ $16.5B

Net debt ~$2B

Payout ratio ~63%

Beta = 0.4

Dividend yield 2.45%

 

Estimated valuation ratios:

EV/EBITDA = 14.1

P/E =26

 

Clorox is one of The Dividend Aristocrats paying increasing dividends since 1978 year. Currently dividend yield is around 2.45% – rather low, as historically company was paying around 4%.

 

Drawdown risk analysis:

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Although market is quite volatile over the last months CLX share price is about its’ all time high levels. As I wrote few times – it makes company not investable for me. I want to buy companies on special occasions.

 

Summing up, Clorox is a high quality stable business, but currently in my opinion investors are paying too much for shares – I think I will reconsider buying on some big sell-off. I will reconsider company at $100.

 

Disclosure CLX – no position