Clorox? More Like Snore-ox!

With the release of its fiscal fourth-quarter and full-year results as well as 2011 guidance, bleach behemoth Clorox (NYSE: CLX  ) managed to, well, pretty much put everyone to sleep. Fourth-quarter earnings per share were flat with last year -- and right on target with what analysts had expected -- while volume and sales crept up 2% and 1%, respectively.

Full-year results were a bit peppier -- with EPS growth of 12% on a sales increase of 2%. And the company confirmed its 2011 guidance of $4.50 to $4.65 in earnings per share, which was right on par with Wall Street's estimates and surely made everyone feel warm and fuzzy inside.

Of course if you're a Clorox investor, it's unlikely that you're in it looking for wild and crazy earnings releases that will send the stock soaring or plunging. You know that with a quality portfolio of brands like Clorox, Glad, Brita, and Burt's Bees, Clorox can dependably perform -- which will mean growing dividends and continued share buybacks.

On the horizon
Unfortunately, that dependability isn't immutable, and Clorox certainly has its challenges. While the company has to tangle with brands from giants such as Procter & Gamble (NYSE: PG  ) , Colgate-Palmolive (NYSE: CL  ) , and Kraft (NYSE: KFT  ) , there has been increasing concern over the threat from generics -- think Safeway (NYSE: SWY  ) brand salad dressing or Target (NYSE: TGT  ) brand bleach -- as consumers continue to feel the pinch.

While there's definitely some truth to that threat, there would have to be an absolute sea change to unseat most of Clorox's products. Back in March, the company gathered data on the market share for its brands versus competitors -- including generics -- and the top brands such as Clorox, Brita, and Kingsford still claim a commanding 60%-plus of their markets.

Meanwhile, Clorox has been set on broadening and deepening the penetration of some of its product lines while riding what it calls "global consumer megatrends." Specifically, Clorox is positioning its cleaning brands to be the go-to brands for obliterating H1N1 and other nasty viruses and infections, while it's emphasizing its natural and environmentally friendly brands like Burt's Bees.

Should you hop aboard?
Unless we have another massive recession, good luck finding a company like Clorox at a true bargain price.

Currently, analysts see the company growing earnings at around 9.5% per year over the next five years. Clorox will have to work to hit that, but it's definitely an achievable hurdle. At that kind of growth pace, the stock looks pretty fairly priced to me right now -- not particularly cheap, but not really expensive either.

Investors looking for a stock that's going to rock and roll, Clorox probably isn't where it's at. But with a dependable business and a nice 3.4% dividend yield, you could definitely do worse.

Looking for stock that my fellow Fools think are buyable right now? Check out the 11 O'Clock Stock!

Clorox and Procter & Gamble are Motley Fool Income Investor recommendations. The Fool owns shares of and has written covered calls on Procter & Gamble. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Matt Koppenheffer does not own shares of any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or on his RSS feed. The Fool's disclosure policy assures you no Wookiees were harmed in the making of this article.


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