Clorox’s 5% Yield Dominates Consumer Staples: Can It Continue?

Clorox (CLX) recently paid a $1.24 per share dividend, extending its 48-year streak of increases, resulting in a 4.07% yield despite operational turbulence and margin pressures. While cash flow coverage has improved from a concerning 2024, the company faces challenges including compressed gross margins due to consumers trading down, and efficiency disadvantages compared to peers like P&G. The premium yield reflects investor skepticism about Clorox’s near-term prospects, contingent on successful execution of margin expansion and a return to volume growth.