Key Takeaways
🌱 Clorox offers a dividend yield of 3.52%, above its 5-year average, with dividend growth slowing due to recent challenges.
💵 Despite financial strain, Clorox maintains solid free cash flow ($558 million), but its payout ratio is high, signaling potential sustainability concerns.
📊 Analyst sentiment remains cautious with multiple recent price target downgrades, reflecting concerns over margin pressures and softening demand.
📋 Clorox’s latest earnings showed a sharp rise in EPS to $1.54, helped by cost control and one-time insurance recoveries, despite a 15% revenue decline year-over-year.
👩💼 CEO Linda Rendle is navigating significant challenges, focusing on operational improvements, innovation, and strategic acquisitions such as fully acquiring the Glad business.
Updated 4/22/25
Clorox (CLX) is a household name with a long-standing track record of dividend reliability and steady financial stewardship. With over 100 years in operation and more than four decades of consecutive dividend increases, the company has built a reputation for delivering shareholder value through consistency and resilience.
Recently, Clorox has faced meaningful challenges, including a cyberattack that disrupted operations and a slowdown in revenue. Even so, it has maintained strong free cash flow, continued strategic investments, and reaffirmed its full-year earnings guidance. Under the leadership of CEO Linda Rendle, the company is actively reshaping its structure and systems while staying committed to its long-term goals. With a current dividend yield above its five-year average and an updated outlook for the fiscal year, Clorox remains a name to watch closely for income-focused portfolios.
🧾 Recent Events
The past year has tested Clorox in ways it probably didn’t see coming. In August 2023, a major cyberattack hit the company’s internal systems. The aftermath disrupted manufacturing, supply chains, and product availability—dragging down revenue for the quarters that followed. While Clorox has largely recovered its operations, the damage to its financials has been done.
Looking at the numbers, revenue over the past 12 months was about $7.17 billion. But compare that to a year ago, and you’ll see quarterly revenue dropped over 15%. That’s a real slip. Interestingly, net earnings have jumped more than 100% year-over-year in the most recent quarter, largely due to easier comparisons and a little help from price increases. But the ride has been anything but smooth.
Debt is another weight on the company’s shoulders. Right now, total debt sits just above $3 billion, while cash reserves are just shy of $300 million. The current ratio has fallen below 1, and the debt-to-equity ratio has soared into the stratosphere—above 2,500%. That last figure is skewed by a negative book value, but it still paints a picture of financial strain. It’s something investors can’t overlook, especially when the company’s long-standing dividend commitment hangs in the balance.
💰 Key Dividend Metrics
📦 Forward Dividend: $4.88 per share
📈 Yield: 3.52%
🕰 5-Year Average Yield: 2.90%
⚖️ Payout Ratio: 131.88%
📅 Next Payment Date: May 9, 2025
🚫 Ex-Dividend Date: April 23, 2025
📤 Dividend Overview
A 3.5% yield for a company like Clorox doesn’t come around too often. It’s usually priced at a premium thanks to its reputation for consistency. Right now, investors can pick it up with a bit more income upside than the five-year average. But a high yield isn’t always a gift—sometimes it’s a red flag.
The payout ratio is sitting at about 132%. That means the company is sending out more in dividends than it’s making in net income. Now, that kind of thing can fly for a quarter or two, especially when there’s strong free cash flow in the background. But if earnings don’t bounce back soon, sustaining the current payout could start to look like a stretch.
To be fair, Clorox is still generating decent cash. Over the past year, operating cash flow was just over $900 million, and free cash flow landed around $558 million. The dividend is definitely consuming a large portion of that, though. There’s not a lot of breathing room, and that’s not ideal when you’ve got macro pressures, lingering supply chain issues, and a high debt load to juggle.
Still, this is Clorox we’re talking about. The board has never been trigger-happy with the dividend. It would take a pretty serious downturn to push them toward a cut. But even the most loyal dividend investors need to acknowledge that the current setup is tighter than usual.
📈 Dividend Growth and Safety
Clorox has earned its stripes as a Dividend Aristocrat, having increased its dividend for 46 consecutive years. That’s a club you don’t get into without a clear commitment to rewarding shareholders. The mindset here is clear: the dividend is sacred.
That said, the pace of those increases has cooled. The most recent hike was on the modest side, and with everything going on in the business, future increases are likely to remain conservative. That’s not a huge surprise, but it’s a shift from the strong dividend growth days of the past.
Clorox’s free cash flow payout ratio is also pushing toward the high end. Not long ago, the company was paying out less than 70% of its free cash flow. Now, it’s closer to 90–95%. That kind of climb tells us that Clorox is leaning harder on its cash reserves to keep shareholders happy. If earnings don’t firm up, there’s little wiggle room.
One more number worth flagging is the return on equity, which is currently a sky-high 276%. On the surface, that sounds fantastic. But the reality is more complicated—it’s inflated by the company’s leverage. Strip out the debt, and Clorox’s returns look a lot more average. It’s a reminder that while the yield is tempting, the engine behind it is under more stress than usual.
Still, Clorox isn’t a high-beta name. Its 5-year beta is just 0.60, meaning it tends to move less than the broader market. That’s not a bad trait to have in volatile times. Even when earnings hit a rough patch, the stock tends to hold up reasonably well—which helps make the dividend feel a bit more reliable, even when the numbers underneath are flashing yellow.
Right now, Clorox is walking a fine line. It’s keeping the dividend going strong, but it’s also dealing with some real headwinds. Investors who count on that income stream should keep a close eye on cash flow and debt levels moving forward. There’s still a lot to like here—but the margin for error is slimmer than it’s been in years.
Cash Flow Statement
Clorox generated $923 million in operating cash flow over the trailing twelve months, a solid improvement from the previous fiscal year’s $695 million but still below its earlier highs. The company’s free cash flow followed a similar pattern, reaching $695 million in the TTM period, up from $483 million last year but shy of the nearly $1 billion levels it saw in prior years. This uptick in cash generation is encouraging, especially as it comes after a year marked by supply chain challenges and elevated cost pressures.
On the investing side, cash outflows were relatively modest at $84 million, notably lower than prior years, indicating a more conservative capital investment stance. Capital expenditures were steady at $228 million, suggesting maintenance rather than expansionary spending. Financing activities, however, reflected significant cash usage at $897 million, driven by stock repurchases and debt-related movements. The end cash position improved to $300 million from $207 million, showing stronger liquidity, though still not far above where it stood a few years ago. Overall, the cash flow profile paints a picture of a company working to stabilize operations while maintaining its commitment to shareholder returns.
Analyst Ratings
📉 Clorox has recently seen a series of downward adjustments to its price targets from various analysts, reflecting cautious sentiment amid operational challenges. 🧾 Deutsche Bank lowered its price target from $166 to $150 while maintaining a Hold rating, citing concerns over margin pressures and softening demand in key product categories. 🧾 Similarly, UBS reduced its target from $176 to $154, also keeping a Neutral stance, pointing to uncertainties in the consumer staples sector and potential impacts from fluctuating input costs.
📉 Other firms have echoed this cautious outlook. 🧾 Wells Fargo adjusted its target to $145 from $155, maintaining an Equal Weight rating, while TD Cowen brought its target down to $145 from $170, holding a similar position. 🧾 Citigroup also revised its target to $150 from $165, reflecting tempered expectations for near-term growth.
📊 Despite these adjustments, the consensus among analysts remains a Hold, with an average price target around $153.83. 📌 This suggests a modest upside from current levels, but also indicates that analysts are awaiting clearer signs of recovery in Clorox’s financial performance before adopting a more bullish stance.
Earning Report Summary
A Quarter of Mixed Signals
Clorox’s most recent quarterly update gave investors a mix of reassurance and reminders that the company is still finding its footing. Net sales came in at $1.69 billion, which was down 15% from the same quarter a year ago. The drop was mostly due to two factors: a tough comparison against last year’s post-cyberattack inventory rebuild and the exit from a few non-core businesses. So while the top line fell, it wasn’t exactly a surprise.
What stood out more was the bottom line. Clorox reported diluted earnings per share of $1.54, which was a sharp jump from $0.75 last year. That jump had a lot to do with insurance recoveries and not having to deal with the same one-time charges that weighed on results a year ago. When you strip those out, the adjusted EPS was $1.55—lower than last year’s $2.16, but not too far off from expectations considering the revenue dip.
Margin Moves and Cash Momentum
Even with lower sales, gross margin ticked up to 43.8%. That’s a sign Clorox is getting a handle on its costs, likely through price adjustments and operational improvements. Operating cash flow was another bright spot. Year-to-date, it came in at $401 million, which is more than double what it was this time last year. That kind of improvement in cash flow gives the company more breathing room to fund dividends, manage debt, and invest back into the business.
Leadership’s Tone and What’s Next
CEO Linda Rendle sounded upbeat about how the company is managing through a challenging stretch. She pointed to stronger-than-expected numbers in sales, margin, and earnings as evidence that Clorox is on the right track. She also emphasized the company’s focus on long-term transformation, particularly the rollout of a new enterprise planning system in the U.S. This isn’t the kind of change that delivers overnight results, but it’s part of the groundwork for more efficient operations down the road.
There was also news on the brand front. Clorox announced it will buy out Procter & Gamble’s 20% stake in the Glad business by early 2026, giving it full control of that product line. It’s a move that could strengthen Clorox’s hand in the household essentials space—especially with garbage bags and food wraps continuing to be steady performers.
Looking ahead, the company raised its full-year earnings outlook to a range of $5.52 to $5.92 per share. That’s a big jump from last year, thanks in part to lapping some unusual costs. It’s a cautious but optimistic outlook, suggesting leadership believes the worst of last year’s disruptions are behind them.
Chart Analysis
Price Trend and Moving Averages
CLX has seen quite a bit of movement over the past year. After bottoming out around late May to June, the stock staged a strong rally into the fall, peaking just above $170 in November. From there, though, it’s been a steady decline. The 50-day moving average (red line) shows a clear topping pattern, having rolled over sharply since February. Meanwhile, the 200-day moving average (blue line) has continued to slope upward, but that may be losing steam if the current trend persists. The stock price is now trading below both moving averages, which is generally not a great technical sign. This suggests the recent downtrend is well-established, and momentum hasn’t yet shifted back in favor of the bulls.
Volume and Market Activity
Trading volume hasn’t spiked consistently, though there were a few notable surges—especially in late February. That was likely tied to earnings or broader market events. Aside from those brief bursts, the volume has remained moderate, which indicates that while the trend is negative, it’s not yet accompanied by panic selling. Investors appear to be reducing exposure gradually rather than exiting all at once.
Momentum and RSI Signals
Looking at the Relative Strength Index (RSI) at the bottom of the chart, the stock has spent a fair amount of time below the 50 level, which reinforces the broader weakness. It’s not in extreme oversold territory, but it’s hovering in that lower range where buying momentum tends to be muted. During the run-up in the fall, RSI stayed comfortably above 50, even pushing into overbought levels at one point—signaling strength. Now, the pattern has flipped, and RSI has been unable to break higher with any consistency since early February.
Overall Technical Picture
The recent breakdown below the 200-day moving average and continued decline of the 50-day line paints a cautious picture. Price has lost upward momentum, and there’s no current sign of a reversal forming. Without a strong base or uptick in volume, the chart suggests the stock may continue to drift lower or consolidate at current levels. Investors will want to see the RSI regain strength and price reclaim the 50-day average before feeling more confident about a sustained recovery.
Management Team
Clorox’s leadership is anchored by Chair and CEO Linda Rendle, who has been with the company for over two decades. She stepped into the CEO role in 2020, bringing a deep understanding of the business and a commitment to innovation and sustainability. Under her guidance, Clorox has navigated significant challenges, including a major cyberattack and shifting consumer behaviors.
In early 2025, the company announced a transition in its financial leadership. Longtime CFO Kevin Jacobsen, who joined Clorox in 1995 and served as CFO since 2018, is set to retire. He will be succeeded by Luc Bellet, a company veteran with nearly 20 years of experience in financial planning and business development. Bellet’s appointment reflects Clorox’s strategy to promote from within and maintain continuity in its financial operations.
The broader executive team includes leaders overseeing various aspects of the business, such as marketing, operations, legal affairs, and diversity initiatives. This collective expertise positions Clorox to adapt to market changes and drive long-term growth.
Valuation and Stock Performance
As of April 2025, Clorox’s stock is trading around $139.78, reflecting a modest recovery from its 52-week low of $127.60 but still below its high of $171.37. The company’s market capitalization stands at approximately $17.08 billion, with an enterprise value of $19.88 billion. The stock’s beta of 0.60 indicates lower volatility compared to the broader market.
Clorox’s price-to-earnings (P/E) ratio is currently elevated, suggesting that investors are pricing in expectations of future earnings growth. However, some analysts estimate the intrinsic value of the stock to be around $133.67, indicating a potential overvaluation of about 4 percent at current prices. This assessment considers both discounted cash flow and relative valuation metrics.
Over the past year, Clorox’s stock has experienced fluctuations due to various factors, including the impact of a cyberattack on its operations and shifts in consumer demand. Despite these challenges, the company’s consistent dividend payments and focus on operational efficiency have provided some support to its stock performance.
Risks and Considerations
Clorox faces several risks that could impact its financial performance and stock valuation. One significant event was a cyberattack in August 2023, which disrupted the company’s IT systems and led to product shortages. While Clorox has taken steps to enhance its cybersecurity measures, the incident underscores the vulnerability of its operations to digital threats.
Additionally, Clorox’s Australian subsidiary was fined approximately $5.2 million in April 2025 for making false environmental claims about its Glad-branded products. The company had advertised that the products were made from recycled ocean plastic, but investigations revealed that the materials were sourced from inland areas. This incident highlights the importance of accurate marketing and the potential reputational risks associated with misleading claims.
Market dynamics also pose challenges. Changes in consumer preferences, increased competition, and fluctuations in raw material costs can affect Clorox’s profitability. Moreover, the company’s reliance on a few key product categories means that any decline in demand for these products could have a disproportionate impact on overall revenues.
Final Thoughts
Clorox has demonstrated resilience in the face of operational disruptions and market challenges. The company’s leadership transitions, focus on innovation, and commitment to sustainability initiatives position it for potential long-term growth. However, investors should remain cognizant of the risks associated with cybersecurity, regulatory compliance, and market competition. As Clorox continues to adapt to the evolving consumer landscape, its ability to maintain operational efficiency and uphold brand integrity will be crucial determinants of its future success.