This is the kind of household-name stock that usually bores you to sleep. Lately, it’s been anything but.
After years of bad headlines and operational speed bumps, the business is starting to look more normal again, even if the stock price still hasn’t gotten the memo.
Future Winners (Sponsored)
It just signed a deal to get its tech in Apple's iPhone until 2040!
Online commenters are debating if this brand-new company will be the 7th trillion-dollar stock.
Details on the controversy here.
The Setup
Clorox Co (NYSE: CLX) is a consumer staples staple: bleach, cleaning, bags and wraps, litter, charcoal, water filtration, and personal care.
It’s also a Dividend King, meaning it has raised its dividend for at least 50 straight years.
The market, however, has treated it like a problem child.
Shares are down sharply over the last year and trading near the bottom of the 52-week range, while the dividend yield has climbed to roughly the 5% neighborhood because the price fell.
What Clorox Actually Does
Clorox sells everyday repeat purchase products that live in the pantry, under the sink, or in the laundry room. The moat is not secret chemistry.
It’s shelf space, brand trust, distribution, and the fact that a lot of households default to familiar labels when they’re not trying to overthink a $6 purchase.
That makes it a cash-flow style business in normal times.
When it’s humming, the playbook is simple: steady demand, modest pricing power, disciplined cost control, and dividends that keep compounding.
Poll: What feels more stressful?
Nationwide Impact (Sponsored)
It’s not a war – not officially, not yet. But Washington is invoking emergency powers… issuing executive orders… and funneling trillions into a rapid economic mobilization.
To discover what’s really going on – and which stocks could be impacted.
WATCH NOW
Why The Stock Has Been So Weak
CLX is basically the poster child for a great business getting hit by multiple waves at once:
1) The Pandemic Hangover
Demand spiked during the pandemic, then normalized. The market had to reprice the business from permanent step-change back to mature staples company.
2) Inflation Squeezed the Model
Even a branded staples company feels it when inputs and logistics jump. You can raise prices, but it takes time for that to fully flow through.
3) A Real Operational Gut Punch: the Cyberattack
Clorox disclosed a cyberattack in 2023 that disrupted operations and pressured results. That was not a narrative problem, it was a nuts-and-bolts supply and fulfillment problem.
The cumulative effect was simple: investors stopped paying a premium multiple for the safe name and started demanding proof that the engine was back.
Want to make sure you never miss a stock recommendation?
Elite Trade Club now offers text alerts — so you get trending stocks and market-moving news sent straight to your phone before the bell. Email’s great. Texts are faster.
The Bull Case
1) The Recovery is Showing Up in the Numbers
Clorox has posted results that point to improving profitability and more stable execution as it moves further away from the cyberattack disruption period.
Reuters has also tied recent performance and outlook to margin improvement helped by cost actions and volume recovery.
If you’re looking for a basic “is this getting better?” signal in staples, gross margin trajectory matters a lot. And the direction has been healthier versus the messy stretch.
2) The Dividend Looks like a Feature, Not a Trap
A near-5% yield from a Dividend King is rare because these stocks usually don’t get this cheap unless something is broken.
The market is still pricing in skepticism, but the dividend history raises the bar for management to protect and grow it over time.
The practical appeal is obvious: you get paid while you wait for normalization.
3) Staples Don’t Need Hero Growth to Work
This is not a triple revenues story. A credible path is: stabilize volumes, keep price/mix rational, reduce friction in operations, and let margin structure do the heavy lifting.
If that happens, you can get a re-rating even with modest top-line growth.
4) Street Expectations Sound More like Execution, Not Miracles
Jefferies’ framing is basically that CLX still has work to do, but better visibility and an inflection later in the year could matter for how investors underwrite 2027-style earnings power.
That’s the right kind of bull case for this name: less hype, more prove it quarter by quarter.
The Defense Plan (Sponsored)
Foreign powers are challenging the dollar while global tensions continue to rise.
Markets reward preparation, not hesitation, during moments of political and economic stress.
Savings left unprotected often take the hardest hit when volatility accelerates.
This Patriot’s Tax Shield shows how physical gold has historically helped investors protect purchasing power.
A free Wealth Protection Guide breaks down how Trump’s vision could create renewed momentum for gold.
Get the FREE guide and see how to protect savings today.
The Bear Case
1) Volume Fragility is the Silent Risk
Consumers trade down when budgets tighten. Private label is always lurking.
If volume stays soft, the company can hold margins with price, but growth gets harder and the multiple stays capped.
2) Operational Fixes Can Take Longer than Investors Want
Cyberattack fallout is the extreme example, but staples supply chains are complicated.
If execution slips again, the market won’t be patient because it already lived through the messy chapter once.
3) Staples are Not Immune to Higher for Longer
Even if CLX is improving, the stock’s valuation and investor appetite can still be influenced by rates.
A 5% yield helps, but it doesn’t fully insulate the equity if the market is repricing risk.
A Useful Extra Lens: What A Real Turnaround Looks Like In Staples
Turnarounds in consumer staples are rarely dramatic. They’re usually boring, measurable, and repeatable:
Promotion discipline: not buying volume at dumb margins
Mix improvement: leaning into categories where brand power is strongest
Service levels: getting product on shelves consistently
Marketing ROI: spending enough to protect share without lighting money on fire
Cost systems: freight, manufacturing, packaging, and sourcing improvements that stick
If you see those checkboxes getting ticked across multiple quarters, the stock can re-rate quietly.
If you see the company bouncing between a good quarter and an oops quarter, it stays trapped.
What I’d Watch Next
Gross margin and any commentary on cost headwinds vs tailwinds
Volume trends (are consumers coming back, or just paying higher prices?)
Market share indicators as the business moves further past the disruption period
Dividend sustainability signals (payout comfort level, cash generation, willingness to keep the streak alive)
My Take
CLX looks like a classic “brand still matters, execution got ugly” setup. The stock is priced like investors still don’t trust the story, which is exactly why the yield is so high right now.
If the company keeps posting cleaner quarters, the upside case doesn’t require perfection. It just requires normalcy.
The simple bull path is: margins continue to heal, volumes stop leaking, and the dividend keeps doing its job in the background.
If that happens, CLX can shift from a frustrating chart to a very investable staples rebound, with a 5% yield paying you for the patience.
That’s all for today. Thank you for reading. If you have any feedback, please reply to this email.
Best Regards,
— Adam Garcia
Elite Trade Club
Click here to get our daily newsletter straight to your cell for free.
P.S. Just like this newsletter, it's 100% free*, and you can stop at any time by replying STOP.
