Clorox: Undervalued Near Dividend King, And A Possible Even Better Strategy

Clorox (CLX) is rated a 'Buy' at $87.1, with a 37% undervaluation and 44.7% potential total return, supported by a robust dividend yield and conservative growth outlook. Short-term headwinds—ERP transition, supply chain costs, and high oil prices—are expected to ease, while the GOJO acquisition and international expansion underpin long-term growth. Dividend sustainability is challenged by an 89% payout ratio in FY26, but gradual EPS growth and minor dividend hikes should normalize payout to 60-65% over five years.