Consumer Sector Ideas

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Clorox - >>> 3 Recession-Ready Stocks to Buy Right Now


https://www.fool.com/investing/2020/10/29/3-recession-ready-stocks-to-buy-right-now/


Consumer staple companies like Clorox can be one of the safest investments during a recession. Unlike most sectors of the stock market, which more or less rely on a growing economy to fuel their sales growth, demand for Clorox's products is consistent despite the market cycle. Generally speaking, this means that consumer staple stocks will underperform a bull market but outperform a bear market.

Demand for Clorox's products is soaring, and it's not just wipes and bleach. The company's Clorox Total 360 System disinfects surfaces and has been approved by the EPA to kill the virus. Major U.S. airlines like United Airlines are using Total 360 to clean their planes after most flights.

Despite all of the challenges facing the stock market this year, shares of Clorox are up close to 40%, significantly outperforming the market. Clorox's Fiscal Year 2020, which ended on June 30, 2020, reported an 8% increase in total sales, a 16% increase in diluted earnings per share, and a 170-basis point increase in gross profit margin to 45.6%. The success was largely driven by Clorox's health and wellness segment.

Although Clorox expects a flat to low-single-digit revenue increase in Fiscal Year 2021, the fundamental strength of the company's business gives it recession resilience. Clorox is also a Dividend Aristocrat, having increased its dividend for 43 consecutive years. The stock yields 2.1% at the time of this writing.

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