A Dividend Aristocrat Pays 2.6% Dividend Yield and Four Decades of Rising Dividends
By: Ned Piplovic,
A consumer products company that owns many household name brands, has been rewarding its shareholders with rising dividends for the past 40 years and currently offers a 2.6% dividend yield, which is considerably higher than its peers in the consumer products segment.
In addition to the long and steady dividend payout growth, the company offers a generous asset appreciation for total return of more than 100% over the past five years.
With an October 24, 2017, ex-dividend date and a November 13, 2017, pay date, interested investors have plenty of time to investigate financial performance and outlook before taking a long position in this company’s stock.
The Clorox Company (NYSE:CLX)
Founded in 1913 and headquartered in Oakland, California, The Clorox Company manufactures and markets consumer and professional products worldwide. The company operates through four segments: Cleaning, Household, Lifestyle and International. In its product lineup, the company offers laundry additives, home care products, stain fighters and color boosters under the Clorox, Formula 409, Liquid-Plumr, Pine-Sol, S.O.S and Tilex brands, as well as Green Works branded naturally derived products.
CLX also manufactures and distributes professional cleaning and disinfecting products under the Clorox, Dispatch, Aplicare, HealthLink and Clorox Healthcare brands. Additionally, the company makes charcoal products under the Kingsford and Match Light brands, as well as bags, wraps and containers under the Glad brand. Cat litter products under the Fresh Step, Scoop Away and Ever Clean brands are also part of the company’s product portfolio. The company also owns Hidden Valley, KC Masterpiece, Kingsford and Soy Vay brands used for distribution of dressing and sauces, the Brita water-filtration systems and filters brand and the Burt’s Bees brand of natural personal care products. The main distribution channels for the company’s assortment of products are mass retail and grocery outlets, warehouse clubs, dollars stores, e-commerce channels, military stores and medical supply distributors.
The company’s current quarterly dividend of $0.84, which is 5% higher than it was one year ago, is equivalent to a 2.6% dividend yield and a $3.36 annual dividend distribution. This current dividend yield is 42.2% higher than the straight average yield for all companies in the consumer products sector and an even more impressive 148.85% higher that the companies in the cleaning products segment.
While the company started paying dividends 49 years ago in 1968, its current consecutive rising dividends streak goes back to 1976. Over the past 41 years of rising dividends, CLX hiked its annual dividend at an average rate of 8.6% every year. Over more than four decades that Clorox has been paying rising dividends, the company boosted its annual dividend payout more than five-fold.
Because of the long-term rising dividend history, the Clorox Company is a member of an exclusive group of 51 companies that are designated Dividend Aristocrats. In addition to a record of raising annual dividends for at least 25 consecutive years, dividend aristocrats must be part of the S&P 500 Index and must have a market capitalization of more than $3 billion.
The company’s share price dropped about 11% between late September 2016 and early November 2016 when the share price reached its 52-week low of $111.24. After the November low, the share price reversed course to rise 27.4% and reached a new all-time high of $140.25 on June 19, 2017.
Since the June peak, the share price pulled back a little more than 8% and closed on September 22, 2017, at $129.83, which is slightly above the share price from last September and 16.7% higher than the November 2016 52-week low.
While the current share price is only 3.3% higher than it was 12 months ago, combined with the dividend distributions over the last year, the total return for investors was 5.80%, with a 44.00% return over the last three years and more than a 100% total return over the past five years.
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