The Clorox Company (CLX): Among the Growing Dividend Stocks with Low PE Ratios

Yahoo

25-04-2025

We recently published a list of the . In this article, we are going to take a look at where The Clorox Company (NYSE:CLX) stands against other growing dividend stocks.
Value stocks are enjoying a rare period of strength amid this year's broader market downturn. With earnings season approaching, it remains to be seen whether their recent edge over high-growth stocks will hold.
The S&P Value Index—which includes sectors like banking, consumer staples, and healthcare, featuring companies that trade at relatively low valuations—has fallen around 9% this year. That's a smaller drop compared to the more than 15% decline seen in the growth-focused counterpart.
Concerns over steep valuations in the tech sector, coupled with a wave of risk aversion triggered by tariffs, have pushed investors to shift from growth to value. While similar shifts haven't lasted long in the past, some investors believe that this time could be different, as expectations for value-oriented firms are modest enough that they may exceed them when earnings reports begin next month. Dan Morgan, senior portfolio manager at Synovus Trust, made the following comment about value investing:
'The bar has been set pretty low for value stocks compared to the uncertainty surrounding growth names and their ability to deliver on earnings estimates. If value can at least match or slightly beat expectations, the runway is clear for them.'
According to data from Bloomberg Intelligence, analysts are forecasting a 12% decline in first-quarter earnings for value companies compared to the same period last year, while growth companies are expected to post a 20% increase.
Supporters of value stocks believe that these lower expectations are already factored into their relatively modest valuations. On the other hand, optimism surrounding growth stocks—particularly in the tech sector—has soared in recent years, largely driven by enthusiasm over advancements in artificial intelligence.
Historically, value stocks have lagged behind. Over the past 20 years, the S&P 500 Value Index has only outperformed its growth counterpart five times on an annual basis. During that period, the value index climbed 202%, while the growth index surged by 600%. Michael O'Rourke, chief market strategist at JonesTrading Institutional Services, made the following statement:
'Growth is about 40% more expensive; this outperformance of value was very long overdue. Due to the incredible strength of the Magnificent Seven, too many investors crowded into growth thinking it won't correct.'
Investors often turn to dividend stocks when looking at companies with lower valuations. Dan Lefkovitz, a strategist at Morningstar Indexes, pointed out that dividend-growth stocks—those known for consistently raising their payouts—have underperformed the broader market in 2024. He attributed this to a market that has largely been driven by a handful of fast-growing tech names. However, he also remarked that while dividend-paying stocks may trail during such growth-led rallies, they tend to hold up better during market downturns, as seen in 2022 and 2018.
Companies that consistently raise their dividends are often both profitable and financially stable—traits that become especially important during times of economic downturn.
A team of professionals prepping for a training seminar, using professional cleaning products produced by the company.
For this list, we focused on dividend-paying companies that have consistently paid dividends over the years and have also demonstrated a track record of increasing their payouts. From that group, we considered stocks with forward P/E ratios below 25, as of April 22. The stocks are ranked in ascending order of their P/E ratios.
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Forward P/E Ratio as of April 22: 18.76
The Clorox Company (NYSE:CLX) is an American company that specializes in the manufacturing and marketing of consumer and professional products. The company's strong market position is closely tied to its close partnerships with major retailers. Walmart alone makes up about 25% of the company's sales, and the top five customers collectively generate nearly half of its total revenue. Although this level of customer concentration could be viewed as a potential risk, it actually gives Clorox significant bargaining power. These relationships help the company gain premium shelf space, run cross-brand promotions, and collaborate on marketing efforts—advantages that are difficult for rivals to replicate.
In fiscal Q2 2025, The Clorox Company (NYSE:CLX) reported revenue of $1.7 billion, which fell by 15.2% from the same period last year. However, the revenue beat analysts' estimates by $60 million. Gross margin rose by 30 basis points, reaching 43.8% compared to 43.5% in the same quarter last year. This improvement was mainly due to cost-saving initiatives and the positive impact of selling off the VMS and Argentina operations. However, these gains were somewhat offset by lower cost absorption and increased expenses related to manufacturing, logistics, and raw materials.
The Clorox Company (NYSE:CLX)'s cash position remained strong. Year-to-date, the company generated $401 million in operating cash flow, which showed 132% growth from the prior-year period. The company currently offers a quarterly dividend of $1.22 per share and has a dividend yield of 3.44%, as of April 22. It has been growing its dividends for 22 consecutive years.
Overall, CLX ranks 23rd on our list of the best growing dividend stocks with low P/E ratios. While we acknowledge the potential of CLX as an investment, our conviction lies in the belief that some deeply undervalued dividend stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued dividend stock that is more promising than CLX but that trades at 10 times its earnings and grows its earnings at double digit rates annually, check out our report about the .
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Disclosure: None. This article is originally published at .