Clorox Co /De/ (NYSE: CLX)

Sector: Consumer Defensive Industry: Household & Personal Products CIK: 0000021076
Market Cap 12.14 Bn
P/B -551.73
P/E 15.35
P/S 1.79
ROIC (Qtr) 26.74
Div Yield % 5.01
Rev 1y % (Qtr) -18.90
Total Debt (Qtr) 3.08 Bn
Debt/Equity (Qtr) -139.91

About

The Clorox Company, or CLX, is a multinational manufacturer and marketer of consumer and professional products, with its headquarters in Oakland, California. Established in 1913, the company operates in approximately 25 countries and sells its products in over 100 markets worldwide. The Clorox Company's operations are divided into four reportable segments: Health and Wellness, Household, Lifestyle, and International. In the Health and Wellness segment, Clorox offers a variety of cleaning and disinfecting products, such as bleach, disinfecting wipes,...

Read more

Price action

Investment thesis

Bull case

  • Operating cash flow of 853M provides exceptional 71.08x coverage of minority interest expenses 12M, showing strong core operations.
  • Operating cash flow of 853M provides strong 10.94x coverage of stock compensation 78M, indicating sustainable incentive practices.
  • Robust free cash flow of 636M exceeds capital expenditure of 217M by 2.93x, indicating strong organic growth funding capability.
  • Cash position of 166M provides exceptional 13.83x coverage of minority interest expenses 12M, indicating strong liquidity.
  • Operating cash flow of 853M fully covers other non-current liabilities 385M by 2.22x, showing strong long-term stability.

Bear case

  • Operating cash flow of 853M barely covers its investment activities of (217M), with a coverage ratio of -3.93, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 166M against inventory of 577M, the 0.29 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Operating cash flow of 853M provides thin coverage of dividend payments of (602M) with a -1.42 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Investment activities of (217M) provide weak support for R&D spending of 118M, which is -1.84x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • High financing cash flow of (746M) relative to working capital of (539M), which is 1.38x suggests concerning dependence on external funding for operational needs.

Peer comparison

Companies in the Household & Personal Products
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 PG PROCTER & GAMBLE Co 344.56 Bn 20.55 4.06 35.95 Bn
2 UL Unilever Plc 162.92 Bn 24.93 2.32 -
3 CL Colgate Palmolive Co 64.98 Bn 22.35 3.23 8.42 Bn
4 EL Estee Lauder Companies Inc 38.59 Bn -41.50 2.67 9.42 Bn
5 KMB Kimberly Clark Corp 33.56 Bn 17.05 1.86 7.30 Bn
6 KVUE Kenvue Inc. 32.45 Bn 22.64 2.16 8.97 Bn
7 CHD Church & Dwight Co Inc /De/ 20.90 Bn 26.71 3.40 2.20 Bn
8 CLX Clorox Co /De/ 12.14 Bn 15.35 1.79 3.08 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 2.69 1.45
EV to Cash from Ops. EV/CFO 17.41 8.11
EV to Debt EV to Debt 4.82 4.77
EV to EBIT EV/EBIT 13.68 14.54
EV to EBITDA EV/EBITDA 11.26 7.35
EV to Free Cash Flow [EV/FCF] EV/FCF 23.35 2.98
EV to Market Cap EV to Market Cap 1.22 -1.59
EV to Revenue EV/Rev 2.19 2.00
Price to Book Value [P/B] P/B -551.73 -7.69
Price to Earnings [P/E] P/E 15.35 16.46
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 1.31 9.11
Dividend Payout Ratio % Div Payout % (Qtr) 76.60 12.82
Dividend per Basic Share Div per Share (Qtr) 3.68 0.92
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 70.96 11.25
Interest Coverage Int. cover (Qtr) 12.07 2.65
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 4.41 -96.96
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -40.29 2.29
Dividend Growth (1y) % Div 1y % (Qtr) -23.97 -2.46
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 106.69 -142.06
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 7.94 -154.15
EBIT Growth (1y) % EBIT 1y % (Qtr) 74.32 -155.18
EBT Growth (1y) % EBT 1y % (Qtr) 86.87 -206.88
EPS Growth (1y) % EPS 1y % (Qtr) 122.22 -158.13
FCF Growth (1y) % FCF 1y % (Qtr) -4.93 -5.66
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -9.66 -1.42
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.22 0.82
Cash Payout Ratio Cash Payout (Qtr) 0.56 0.19
Cash Ratio Cash Ratio (Qtr) 0.07 0.76
Current Ratio Curr Ratio (Qtr) 0.76 2.31
Debt to Equity Ratio Debt/Equity (Qtr) -139.91 -2.80
Interest Cover Ratio Int Coverage (Qtr) 12.07 2.65
Times Interest Earned Times Interest Earned (Qtr) 12.07 2.65
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 19.30 -32.28
EBIT Margin % EBIT Margin % (Qtr) 16.04 -37.76
EBT Margin % EBT Margin % (Qtr) 14.71 -40.89
Gross Margin % Gross Margin % (Qtr) 44.30 50.05
Net Profit Margin % Net Margin % (Qtr) 11.70 -42.94