Consumer Sector Ideas

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>>> Clorox - After a major pullback from the latter half of 2020 through the middle of last year, shares of The Clorox Company (CLX 0.22%) are finally on the mend. The stock is up nearly 30% from 2022's low, and knocking on the door of new 52-week highs.


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You know about the company's bleach and disinfectants using the same brand name. These cleaning products prompted the stock's huge run-up in early 2020. The world was looking for ways to protect itself from COVID-19 infections, making Clorox wipes a hot commodity. Once the initial dust settled, of course, the market realized it had pushed the stock far too high, and corrected the mistake over the next couple of years.

It's the Clorox you probably don't know, however, that makes this overly aggressive correction a prospective buying opportunity.

This company is also the name behind consumer goods ranging from Glad trash bags to Fresh Step kitty litter to Kingsford charcoal to Liquid-Plumr, and more. Clorox is now moving forward in a deliberate way with all of these brands, devoting its full attention to the so-called IGNITE growth strategy unveiled in late 2019 -- just before COVID-19 took hold in early 2020 and disrupted the initiative.

It's a slow-moving process. Analysts expect modest earnings growth on minimal revenue growth this year, and they are calling for per-share earnings to improve from $4.27 this year to $5.38 next year. Most of that improvement will likely stem from cost savings, though. Sales are only projected to grow about 3%, and it's still an expensive stock. It is progress, however, and the stock's budding rally says more and more investors are believing in the long-term potential of the IGNITE plan.

Perhaps more important to current and prospective shareholders is the fact that with next fiscal year's projected profits of $5.38 per share, the dividend is more than funded by earnings again. The Clorox Company's 20-year streak of dividend increases is still intact, with another one likely in the cards this year.

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