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\n Share:<\/span><\/p>\n Clorox\u2019s forward dividend yield is now the highest it has been since 2011 and at 3.6% is nearly twice the consumer products sector average.<\/p>\n<\/li>\n Clorox\u2019s recent underperformance is mainly about inflation and rising interest rates that can cause consumers to trade down from branded products to generics.<\/p>\n<\/li>\n CLX is trading at 23x forward earnings compared to the tech-heavy Nasdaq-100, which currently has a forward P\/E around 27x.<\/p>\n<\/li>\n Since\u00a0Clorox Co (NYSE:CLX) rode a pandemic \u2018clean freak\u2019 wave to nearly $240 per share in August 2021, its market value has been bleached by over $13 billion.\u00a0<\/p>\n The dirty truth? Clorox\u2019s 44% two-year plunge has created an opportunity to own a defensive stock with a shiny dividend.<\/p>\n The consumer products mainstay\u2019s 3.6% forward dividend yield is now the highest it has been since 2011 \u2014 and nearly twice the sector average. Better yet, it is a dividend that is only likely to go higher, considering Clorox is a Dividend Aristocrat on account of its 37-year dividend hike streak. In July 2023, the dividend was boosted 2% to $1.20 quarterly (or $4.80 annually).\u00a0\u00a0\u00a0<\/p>\n So why is the current stock price so low and the dividend yield so high?<\/p>\n Do you know which under-the-radar stocks<\/a> the top hedge funds and institutional investors are investing in right now? Click here to find out.<\/p>\n Clorox\u2019s latest slump is a bit of a head-scratcher. The company crushed the consensus earnings per share (EPS) estimate and posted 80% year-over-year profit growth in fiscal Q4. Revenue growth accelerated to 12% with positive contributions from all four operating segments. Profit margins widened, and management predicted further improvement in profitability in fiscal 2024. The market responded appropriately, bidding Clorox shares up 9% on August 3rd. Since then, however, they are down 20%. What gives?<\/p>\n In recent weeks, Clorox has been in the spotlight for a mid-August cyberattack that targeted the company\u2019s IT systems. Last week, management disclosed that the attack has led to \u201cwidespread disruption\u201d of operations, and current quarter financials will be negatively affected. While not good news<\/a>, the hack will probably amount to a temporary setback for the 110-year-old company.<\/p>\n The main reason though is that the broader market has been in a downtrend since August 3rd \u2014 albeit a mild one, with the S&P down about 3%. For Clorox, the huge underperformance is about two familiar foes \u2014 inflation and rising interest rates. With the Fed<\/a> vowing for at least one more rate hike by year-end to combat sticky inflation, the impact on Clorox sales could be negative. As has been the case for the last two years, consumers may be more likely to trade down from branded cleansers and cat litter to generics. It is why management is projecting just 0% to 2% revenue growth in the new fiscal year.\u00a0<\/p>\nKey points<\/h2>\n
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Why is Clorox\u00a0stock down so much?<\/h2>\n