Clorox Boosts Dividend Again After 35 Consecutive Years

Clorox (CLX) announced a quarterly dividend of $0.64 per share that will be payable on August 10th, 2012. The new annual dividend will be $2.56 per year which gives Clorox a dividend yield of 3.82%. This boost in the annual dividends is right on schedule with previous increases from Clorox and positions the company well to add to their 35 consecutive years of increasing the dividend.

The new annual dividend of $2.56 per share is almost 7% higher than the trailing 12 month dividend of $2.4 per share.

Clorox announced that the dividend will be payable to stockholders of record on July 25, 2012, with an ex-dividend date of July 23, 2012. Investors must own the stock on the day before the ex-dividend date to qualify for the dividend.

Dividend Fundamentals

Clorox has solid dividend fundamentals. The new 3.82% dividend yield is above its 5 year yield average of 3.2%. The company has a payout ratio of 60% and a free cash flow yield of 4.77% which makes us believe the dividend is very safe. Clorox has a 3 year net income growth rate of 6.5% and a 3 year dividend growth rate of 8.7%. Add the 35 years of consecutive dividend increases and its easy to see why Clorox is ranked #22 on our top 100 dividend list. This timely increase will help Clorox maintain its DSO rating but in order for it to improve its rank the company will need to grow net income at a faster rate. This will help help boost its dividend yield and maintain a low payout ratio.

About The Company

Clorox manufactures and distributes consumer goods products through multiple distribution chains that include grocery stores and retail outlets. The stock is down 2.6% in the last 12 months but is up 4.8% in the last 6 months (excluding dividend payouts). The company has a P/E ratio of 17 and a market cap of $9B. Some of the companies largest competitors include Colgate-Palmolive Co. (CL) and Proctor and Gamble (PG)

For more information on consumer goods dividend stocks view our list here.

A Different Way To Look At Dividend Yields – Infographic

Dividend data gets a little dry sometimes so we created this infographic to show how dividend-paying stocks fit into the market. This image is also available on our high dividend yield page.

There are over 4600 stocks that trade on the NYSE and Nasdaq exchanges. Here is how the numbers break down:

  • 2030 pay a dividend
  • 780 have a yield over 3%
  • 370 have a yield over 5%
  • 960 have a positive 5 year dividend growth rate
  • 550 have a 5 year dividend growth rate over 7%
  • 55 have a postive 12 month return, dividend yield over 2%, payout ratio under 65, Net income growth rate over 5% and a 5 year dividend growth rate over 7%.

Before You Invest: 3 Questions to Ask Yourself

As you know, one of the best ways to build wealth over time is to invest. Investing part of your money can help you put the power of compound interest to work for you in a way that helps you better secure your financial futures.

However, investing isn’t about just putting your money into some asset and then hoping it grows. Before you invest, here are 3 questions to ask yourself:

1. What Do You Hope to Accomplish?

It’s important to understand your own goals, and know what you hope to accomplish. A good investing strategy will help you reach your goals. Without a plan for your resources, there is a good chance you won’t accumulate as much as you would like over time. Before you invest, sit down and consider your goals. Know what you want to accomplish, and you will have a better idea of how to allocate your assets in order to stand a better chance of reaching your goals.

2. Do You Know What You’re Investing In?

One of the pieces of counsel that Warren Buffett gives about financing is to understand what you are investing in. Before you put your money into something, you should know how it works. Understand how stocks work before you buy a stock. Know what is likely to make bond yields rise and fall. Understand what an index fund is. Before you put your money into something, you should have an idea of what the investment is, and what influences it. You shouldn’t invest in things you don’t understand.

3. Are You Willing to Stay Involved?

Finally, you need to be willing to stay involved. This doesn’t mean that you have to check your portfolio every day and worry about daily price movements. However, you do need to be somewhat involved in your portfolio. You need to make regular contributions to your investment portfolio. Decide on an amount of money that you are comfortable with, and contribute that each month.

You should also periodically rebalance your portfolio. You want to make sure that you are on track. For portfolios that need less active management, considering your situation twice a year is usually enough. Others like to evaluate once a month. Figure out what is appropriate for your portfolio, and the regularly check the situation. You might need to shift your asset allocation, or sell an investment that no longer helps you reach your goal. Even in a “buy and hold” portfolio, you need to show some interest and regular involvement.