New Purchase

Clorox_CLX

I try to keep my readers updated with trades as soon as possible.  I’m reporting one last purchase for the end of June.  This purchase was from an existing position that I wanted to increase my stake in.

As you can see from the picture above, CLX owns a lot of giant brands.  Many of these are Billion dollar brands that are available worldwide.  I hadn’t purchased shares of CLX in over two years so I was overdue to add to this position.

Clorox has a P/E of 21.16 and a payout ratio of 62% while yielding a pretty decent 3.2%.  S&P Capital IQ gives a 3-year estimated EPS CAGR of 7% and Morningstar rates them 4/5 stars currently.  Clorox has raised their dividend consecutively for 37 years making them a Dividend Champion!  They have a 5-year CAGR of 9.4%.  Their latest dividend increase, however, was only 4.2% that they announced in May.  I don’t think shares are cheap by any means but I also don’t think they are overvalued.  CLX is a long-term holding for me and I was due to bring up their weight in my portfolio.

So on Monday I decided to purchase 40 more shares at a cost of 91.83/share.  These 40 shares will provide an additional income of $118.40 per year.  After the purchase my new cost basis is 78.24/share, which is still over 17% below current market values.

I will continue making regular purchases no matter what the markets are doing.  I like the idea of dollar-cost-averaging into positions over time.  I don’t have a lot of new ideas for purchases right now with the markets so elevated so I will likely continue purchasing shares of existing positions.

 

 

 

 

 

Comments

  1. says

    I wouldn’t mind adding CLX to my porfolio and hope to add them in the future. Hopefully sooner rather than later. Lots of great brands and although I expect the dividend growth to be in the 5-7% range for the next few years that’s still plenty good with a solid starting yield.
    JC @ Passive-Income-Pursuit recently posted…Happy 4th of July!My Profile

    • All About Interest says

      PIP,

      I really like the company. It’s tough to find values in this market so I’ll keep adding to existing underweight positions for now. I think 7% wouldn’t be too difficult to achieve for them. As you mention, the starting yield also isn’t bad.

      Thanks for stopping by!

  2. says

    AAI,

    I really like the purchase. The dividends are solid and have a great history. Also as a cheap, well run company, CLorox is a perennial takeover target so I think you have some potential appreciation as well. I don’t know why PG hasn’t acquired this company yet.

    MDP
    My Dividend Pipeline recently posted…June 2014 Passive IncomeMy Profile

    • All About Interest says

      Hi MDP,

      Thanks, I think CLX will be around for as long as I’m alive and continue to reward shareholders. They do have a significantly smaller market cap than that of PG so anything is possible.

      Thanks for stopping by!

  3. minji says

    From Wikipedia:

    In 1957, Clorox was bought by Procter & Gamble, which renamed its new subsidiary “The Clorox Company.” Almost immediately, a rival company objected to the purchase, and it was challenged by the Federal Trade Commission, which feared it would stifle competition in the household products market. The FTC won in 1967 after a 10-year battle, in which the U.S. Supreme Court ruled that P&G must divest The Clorox Company, and on Jan. 1, 1969, Clorox became independent again.

    • All About Interest says

      Minji,

      Thanks for that bit of a history lesson. I think a lot has changed since 1969 and I’m not so sure if the FTC would have a problem with it now.

      Thanks for stopping by

    • All About Interest says

      FFJ,

      I don’t find them cheap but I also don’t think they are overvalued. The starting yield isn’t too bad either as you mentioned.

      I appreciate the support! You are doing great on your end as well.

      Take care!

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