Stock Analysis & Valuation The Clorox Company (0I0J.L)

• Previous Close: £111.98
• Sector Valuation Confidence Level: Low

Valuation method	Value, £	Upside, %
Artificial intelligence (AI)	67.30	-40
Intrinsic value (DCF)	50.06	-55
Graham-Dodd Method		n/a
Graham Formula	41.60	-63

Strategic Investment Analysis

Company Overview

The Clorox Company (LSE: 0I0J.L) is a leading global manufacturer and marketer of consumer and professional products, operating in the Household & Personal Products sector under the Consumer Defensive industry. Headquartered in Oakland, California, Clorox has built a diversified portfolio across four key segments: Health and Wellness, Household, Lifestyle, and International. The company is renowned for iconic brands such as Clorox bleach, Pine-Sol cleaners, Glad bags, Brita water filters, and Burt's Bees natural personal care products. Clorox serves a broad customer base through mass retailers, grocery stores, e-commerce channels, and distributors, leveraging its strong brand equity and innovation in cleaning, health, and lifestyle products. With a history dating back to 1913, Clorox maintains a resilient business model, benefiting from steady demand for essential household and personal care items. Its international segment further diversifies revenue streams, making it a key player in global consumer markets.

Investment Summary

The Clorox Company presents a stable investment opportunity within the Consumer Defensive sector, supported by its strong brand portfolio and consistent demand for household essentials. With a market cap of $16 billion and a beta of 0.598, Clorox exhibits lower volatility compared to the broader market, appealing to risk-averse investors. The company reported $7.1 billion in revenue and $280 million in net income for the fiscal year, with a diluted EPS of $2.25. Operating cash flow remains healthy at $695 million, though high total debt ($2.9 billion) and modest cash reserves ($202 million) warrant caution. Clorox's dividend yield is attractive at $4.88 per share, reflecting its commitment to shareholder returns. However, competitive pressures and input cost inflation could weigh on margins. Overall, Clorox is a defensive play with reliable cash flows but faces challenges in sustaining growth amid economic headwinds.

Competitive Analysis

Clorox holds a competitive edge through its well-established brand portfolio and diversified product offerings, which span cleaning, household, and lifestyle categories. Its Health and Wellness segment, including disinfectants and professional cleaning solutions, benefits from heightened hygiene awareness post-pandemic. However, Clorox faces intense competition from larger conglomerates like Procter & Gamble and Unilever, which have greater scale and resources for innovation and marketing. Clorox's focus on niche markets (e.g., Burt's Bees in natural personal care) provides differentiation but limits its reach compared to global giants. Pricing power is a strength, but private-label competition in commoditized categories (e.g., trash bags, cat litter) poses a threat. Internationally, Clorox's presence is less dominant than rivals like Reckitt Benckiser, which has a stronger foothold in emerging markets. The company's direct-to-consumer and e-commerce strategies are growing but lag behind digitally native competitors. Overall, Clorox's competitive advantage lies in brand loyalty and product diversification, but it must innovate and expand geographically to maintain its position.

Major Competitors

• Procter & Gamble (PG): P&G is a global leader in consumer goods with a vast portfolio including Tide, Dawn, and Swiffer. Its scale and R&D capabilities far exceed Clorox's, allowing for aggressive innovation and marketing. However, P&G's broader focus dilutes its specialization in cleaning and disinfecting, where Clorox excels. P&G's international reach is also more extensive, giving it an edge in emerging markets.
• Unilever (UL): Unilever dominates the household and personal care space with brands like Dove, Domestos, and Seventh Generation. Its sustainability focus and global distribution network are strengths, but its product range is less concentrated on disinfectants compared to Clorox. Unilever's premium pricing in some categories may limit its appeal in cost-sensitive markets where Clorox competes effectively.
• Reckitt Benckiser (RBGLY): Reckitt Benckiser specializes in health and hygiene products, with Lysol and Dettol competing directly with Clorox's disinfectant lines. Its strong presence in emerging markets gives it an advantage over Clorox, but Reckitt has faced challenges in brand management and innovation consistency. Clorox's narrower focus allows for deeper penetration in specific categories like natural personal care.
• Church & Dwight (CHD): Church & Dwight competes with Clorox in household and personal care through brands like Arm & Hammer and OxiClean. Its lower-cost positioning and strong private-label business pose a threat, but Clorox's premium branding (e.g., Brita, Burt's Bees) provides differentiation. Church & Dwight's smaller international presence is a relative weakness compared to Clorox.
• Kimberly-Clark (KMB): Kimberly-Clark focuses on paper-based products (e.g., Kleenex, Huggies), overlapping with Clorox in categories like cleaning wipes. Its global supply chain is a strength, but its lack of diversification into disinfectants and water filtration limits direct competition. Clorox's broader portfolio offers more resilience against sector-specific downturns.