It's hard to get worked up about a company that sells cleaning products and cat litter, but in the case of Clorox (NYSE:CLX), a bit of enthusiasm may be warranted. It just reported fiscal second-quarter profits and revenue that beat expectations, and shares popped 7%.

In this segment from MarketFoolery, host Chris Hill and Motley Fool Asset Management's Bill Barker talk about the nature of Clorox's business, its brand dominance, the investment thesis for the stock, and the bearish counter-argument.

A full transcript follows the video.

Check out the latest Clorox earnings call transcript.

This video was recorded on Feb. 4, 2019.

Chris Hill: Let's move on to a pretty boring company, I say "boring," unless you like making money. Second-quarter profits and revenue for Clorox came in solidly ahead of expectations. Shares of Clorox up 7% this morning. Unlike other companies in this space that we've seen, consumer products companies that have a lot of different levels to their portfolios -- yes, they've got some household cleaning products; yes, they've also got some food products, that sort of thing -- Clorox, unless I'm missing something, appears to be just in the business of cleaning stuff.

Bill Barker: Yeah, you're right, you're missing a lot.

Hill: Oh, OK!

Barker: Yeah.

Hill: Enlighten me, by all means!

Barker: [laughs] Well, the divisions are: cleaning; household, which includes charcoal, cat litter, and Glad bags; lifestyle is the fastest growing, they've got Brita water filters, dietary supplements, and some salad dressings. They're best-known, of course, their name being Clorox, and there are some other cleaning products, the Clorox brand goes on a lot of them -- Pine Sol, 409, Tilex, things like that. None of it is edible stuff, they're not in that part of the grocery store, but they've got a couple of brands that are completely dominant in their category. In terms of bleach, Clorox has 60% to 70% of the market, despite the fact that I can't understand how branding bleach makes it better.

Kingsford Charcoal. Name two other charcoals.

Hill: I really can't.

Barker: No, I told you to name two other charcoals.

Hill: [laughs] Uh...

Barker: $10.

Hill: Isn't there one, SureLight or something like that?

Barker: You're just making up words.

Hill: I don't know! [laughs]

Barker: SureFire, Quick...Light...Fires...

Hill: Something like that. Something with light, I know it's in there.

Barker: No. It's Kingsford, and then everybody else combined has like 25% of the market. So, they're just completely dominant there. Of course, Fresh Step kitty litter is another one of their well-known brands if you happen to be a cat owner.

Hill: I just typed in charcoal brands into Google.

Barker: No! You don't get $10 for googling something!

Hill: I'm not trying to --

Barker: I get $10 from you for cheating!

Hill: [laughs] Not only have I not heard of these other brands, I want to know -- and after the show, we'll do a little bit of a deep dive into the branding of a charcoal called Jealous Devil. Have you ever heard of Jealous Devil?

Barker: No, but I'm not from that part of the country.

Hill: What part of the country?

Barker: I don't know! But I'm from the Kingsford Coal part of the country, which is most of it.

Hill: OK. As I said at the top, this is hard to get excited about if you're an investor -- and yet, it really does seem like one of those obvious investments, that unless you're someone who is at a point in your life where you're just thinking, "All I want are growth investments. All I'm looking for is the David Gardner Rule Breaker types," it really does seem like Clorox should, if not be a requirement to be in everyone's portfolio, it seems like you need a good reason not to have it in there. I don't own shares of it, but as you said, they're dominant in what they do. I believe they pay a dividend. It's up 20% over the past year for a choppy year for the market. And it's hard to envision a climate where people decide en masse to just stop buying cleaning products.

Barker: It is. I'll give you the bear case against it. It's that private label stuff, Clorox being an example. Why should Clorox be dominant five, 10, 15 years from now? If you buy Clorox bleach because that's what Mom bought when you were growing up, and you inherit a lot of consumer brands in that manner. Nevertheless, why not buy generic bleach? They're able to take that Clorox name and then put it onto some other things that you might trust, like hand wipes and things like that. It connotes cleanliness. But, trash bags, kitty litter, things that you know are under attack from private label, and stores are getting better at creating store brands. So, that's the reason to think maybe the next 10 years won't be as good as the last 80 for some of these brands.

But, to date, they're able to maintain relevance. I think that they can continue to pay a hefty dividend and buy back some shares, not have to take big risks, and focus on efficiencies that drive better margins. That's what the stock price today is reacting to, is a little bit of a turnaround in their margin story.