Should You Forget Clorox Stock Near a 52-Week Low?
A nearly 6% dividend yield is tempting for this consumer staple, but problems cloud the investment case.
Clorox (CLX) shares have slipped around 27% over the past year, trading near their 52-week low of $79.12. Despite being a well-known brand with a high dividend yield of 5.8%, the company faces significant challenges. Organic sales, which exclude acquisitions, declined 8% in fiscal 2026, largely due to increased shipments to retailers in the prior year.
Management anticipates modest growth of 3.5% to 4.5% in fiscal 2027, but other issues may persist. The acquisition of GOJO, the maker of Purell hand sanitizer, is expected to boost net sales by approximately $9.5 billion, but one-time costs will negatively impact product manufacturing, selling, and administrative expenses. Clorox's debt has doubled to around $5.1 billion in the past year, and the dividend payout ratio is elevated at 103%, suggesting unsustainable payouts unless earnings improve.
CEO Linda Rendle cautions that the operating environment for fiscal year 2027 remains challenging, with persistent cost volatility and a value-conscious consumer base. While the stock's price-to-earnings ratio is around 15 times consensus earnings estimates, investors might consider waiting before purchasing shares given flat sales, integration costs from GOJO, elevated debt, and a high dividend payout ratio.
Written by urgent.news from Motley Fool's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
