Clorox operates household brands including Clorox bleach, Glad, Burt's Bees, Hidden Valley, and Fresh Step. The company pays an annual $4.92 dividend, yielding just under 5%, after a 37% stock decline over the past year. Fiscal 2025 dividends totaled $602 million against $761 million of free cash flow (79% FCF payout), while fiscal 2024 dividends exceeded free cash flow at 123%. Operating cash flow has been volatile across recent years, and the most recent quarter showed dividends exceeding operating cash flow. Net debt is $2.71 billion (about 2.4x EBITDA) while shareholder equity has fallen from $908 million to $321 million; the company repurchased $332 million of shares in fiscal 2025. Management acknowledged near-term challenges while citing gross margin expansion.
"Clorox paid $602 million in dividends during fiscal 2025 (ended June 30, 2025) against free cash flow of $761 million. That produces a FCF payout ratio of 79%, elevated but manageable. The problem is the trend. In fiscal 2024, the company paid out 123% of free cash flow as dividends-exceeding what the business generated. Operating cash flow has been erratic, swinging from $1.5 billion in fiscal 2020 down to $695 million in fiscal 2024, then back to $981 million in fiscal 2025."
"Clorox carries $2.88 billion in total debt against $167 million in cash, producing net debt of $2.71 billion. With EBITDA of $1.23 billion, the net debt-to-EBITDA ratio sits at 2.4x-manageable for a consumer staples company. The balance sheet concern is shareholder equity, which has declined from $908 million in fiscal 2020 to just $321 million in fiscal 2025. This reflects years of paying out more in dividends and buybacks than the company earned."
Read at 24/7 Wall St.
Unable to calculate read time
Collection
[
|
...
]