Financial Review: Colgate-Palmolive (NYSE:CL) & Clorox (NYSE:CLX)

Clorox (NYSE:CLX) and Colgate-Palmolive (NYSE:CL) are both large-cap consumer staples companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, valuation, earnings, analyst recommendations, dividends, institutional ownership and risk.

Profitability

This table compares Clorox and Colgate-Palmolive’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Clorox	11.40%	377.86%	17.35%
Colgate-Palmolive	14.55%	377.63%	17.86%

Analyst Ratings

This is a summary of recent ratings for Clorox and Colgate-Palmolive, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Clorox	4	12	1	0	1.82
Colgate-Palmolive	1	5	8	0	2.50

Clorox presently has a consensus price target of $130.20, suggesting a potential upside of 8.55%. Colgate-Palmolive has a consensus price target of $91.50, suggesting a potential upside of 16.42%. Given Colgate-Palmolive’s stronger consensus rating and higher possible upside, analysts clearly believe Colgate-Palmolive is more favorable than Clorox.

Volatility and Risk

Clorox has a beta of 0.52, meaning that its stock price is 48% less volatile than the S&P 500. Comparatively, Colgate-Palmolive has a beta of 0.34, meaning that its stock price is 66% less volatile than the S&P 500.

Valuation and Earnings

This table compares Clorox and Colgate-Palmolive”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Clorox	$7.10 billion	2.06	$810.00 million	$6.52	18.40
Colgate-Palmolive	$20.10 billion	3.16	$2.89 billion	$3.56	22.08

Colgate-Palmolive has higher revenue and earnings than Clorox. Clorox is trading at a lower price-to-earnings ratio than Colgate-Palmolive, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

78.5% of Clorox shares are owned by institutional investors. Comparatively, 80.4% of Colgate-Palmolive shares are owned by institutional investors. 0.6% of Clorox shares are owned by insiders. Comparatively, 0.4% of Colgate-Palmolive shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Dividends

Clorox pays an annual dividend of $4.96 per share and has a dividend yield of 4.1%. Colgate-Palmolive pays an annual dividend of $2.08 per share and has a dividend yield of 2.6%. Clorox pays out 76.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Colgate-Palmolive pays out 58.4% of its earnings in the form of a dividend. Clorox has increased its dividend for 47 consecutive years and Colgate-Palmolive has increased its dividend for 63 consecutive years.

Summary

Colgate-Palmolive beats Clorox on 12 of the 17 factors compared between the two stocks.

About Clorox

The Clorox Company manufactures and markets consumer and professional products worldwide. It operates through four segments: Health and Wellness, Household, Lifestyle, and International. The Health and Wellness segment offers cleaning products, such as laundry additives and home care products primarily under the Clorox, Clorox2, Scentiva, Pine-Sol, Liquid-Plumr, Tilex, and Formula 409 brands; professional cleaning and disinfecting products under the CloroxPro and Clorox Healthcare brands; professional food service products under the Hidden Valley brand; and vitamins, minerals and supplement products under the RenewLife, Natural Vitality, NeoCell, and Rainbow Light brands in the United States. The Household segment provides cat litter products under the Fresh Step and Scoop Away brands; bags and wraps under the Glad brand; and grilling products under the Kingsford brand in the United States. The Lifestyle segment offers dressings, dips, seasonings, and sauces primarily under the Hidden Valley brand; natural personal care products under the Burt's Bees brand; and water-filtration products under the Brita brand in the United States. The International segment provides laundry additives; home care products; water-filtration systems; digestive health products; grilling products; cat litter products; food products; bags and wraps; natural personal care products; and professional cleaning and disinfecting products internationally primarily under the Clorox, Ayudin, Clorinda, Poett, Pine-Sol, Glad, Brita, RenewLife, Ever Clean and Burt's Bees brands. It sells its products primarily through mass retailers; grocery outlets; warehouse clubs; dollar stores; home hardware centers; drug, pet, and military stores; third-party and owned e-commerce channels; and distributors, as well as a direct sales force The Clorox Company was founded in 1913 and is headquartered in Oakland, California.

About Colgate-Palmolive

Colgate-Palmolive Company, together with its subsidiaries, manufactures and sells consumer products in the United States and internationally. It operates through two segments: Oral, Personal and Home Care; and Pet Nutrition. The Oral, Personal and Home Care segment offers toothpaste, toothbrushes, mouthwash, bar and liquid hand soaps, shower gels, shampoos, conditioners, deodorants and antiperspirants, skin health products, dishwashing detergents, fabric conditioners, household cleaners, and other related items. This segment markets and sells its products under various brands, which include Colgate, Darlie, elmex, hello, meridol, Sorriso, Tom's of Maine, Irish Spring, Palmolive, Protex, Sanex, Softsoap, Lady Speed Stick, Speed Stick, EltaMD, Filorga, PCA SKIN, Ajax, Axion, Fabuloso, Murphy, Suavitel, and Soupline to a range of traditional and eCommerce retailers, wholesalers, and distributors. It includes pharmaceutical products for dentists and other oral health professionals. Its Pet Nutrition segment offers pet nutrition products for everyday nutritional needs under the Hill's Science Diet brand; and a range of therapeutic pet products to help nutritionally support dogs and cats in different stages of health under the Hill's Prescription Diet brand. This segment markets and sells its products through pet supply retailers, veterinarians, and eCommerce retailers. Colgate-Palmolive Company was founded in 1806 and is headquartered in New York, New York.