Meet the 5.7%-Yielding Stock That Has a Chance of Becoming Profit King Next Year

Clorox (NYSE: CLX) raised its dividend for the 48th year in a row last July. Clorox has yet to announce another raise, but it’s still on track to hit the required 50-year dividend in 2027, which would make it the Dividend King.

Clorox’s rising shares, paired with a falling stock price, pushed its yield to a decade high of 5.7%.

Will AI create the world’s first trillionaire? Our team recently released a report on one little-known company, called “Indispensable Monopoly” that provides essential technology needed by both Nvidia and Intel. Continue »

Here’s why Clorox remains committed to its dividend despite challenges to its core business, and why the stock is now a great buy.

Private label is a growing concern

A recurring theme in the household and personal products industry is that private label products are similar Costco WholesaleKirkland signature, WalmartBest Value, and Sam’s Club Member Mark are gaining market share from name brands.

Clorox CEO Linda Rendle said the following on Clorox’s third-quarter fiscal 2026 earnings call on May 1: “But overall, private label hasn’t had the impact that many would have expected. And I know many of you are asking questions about that. We’ve continued to see it play the role that it usually does, providing the lower value that consumers need.”

Clorox said private label market share remains low in its category, as consumers continue to buy premium products. “But in general, consumers continue to look for products, and they continue to look for full value, not just low value,” Rendle said.

Private label is far from Clorox’s only concern. The company is facing pressure from competitors’ promotions and discounts, especially in the food category. Clorox uses product innovation, preferred shelf placement, and marketing efforts to help address these pressures. But business is clearly affected, with Clorox now forecasting a 9% decline in organic sales for fiscal 2026 compared to guidance from three months ago of a 5% to 9% decline. This means that Clorox’s desperate vision is about to come true.

Clorox has invested in improving efficiency

In addition to divestitures, cost reductions, price pressures, and increased competition, Clorox has been restructuring its Enterprise Resource Planning (ERP).

In February, Clorox announced the completion of a five-year, $580 million ERP implementation, modernizing a more than 20-year-old system. SAP a cloud-based system that integrates finance, supply chain, and marketing. The new system should make the overall business more efficient. But the change has been devastating, namely because of its effect on Clorox’s supply chain.

Clorox is pushing the right buttons to reward patient investors

Clorox’s brutal selloff is a reminder of how much investors hate uncertainty. Management underestimated the duration and cost of ERP transitions, as well as the severity of the decline in consumer spending. The company is also making major changes to its portfolio. These include the sale of its Vitamins, Minerals, and Supplements business and divestitures from Argentina, Uruguay, and Paraguay in calendar year 2024, and the $2.25 billion acquisition of Purell owner GOJO Industries in April of this year.

Despite these changes, Clorox has not been able to provide reliable guidance, often missing its numbers or consistently pointing down.

All that said, the sales at Clorox are completely understandable. But long-term investors care more about where a stock is going than where it has been. Clorox has a potential turnaround for patient investors, especially given the cheap dirt and high yields.

Should you buy stock in Clorox right now?

Before buying stock in Clorox, consider this:

I The Motley Fool Stock Advisor a team of analysts has just identified what they believe to be 10 best stocks for investors to buy now… and Clorox was not one of them. The 10 stocks that made the cut could produce huge gains in the coming years.

Think about when Netflix made this list on December 17, 2004… if you invested $1,000 during our recommendation, you will have $476,034!* Whenever Nvidia made this list on April 15, 2005… if you invested $1,000 during our recommendation, you will have $1,274,109!*

Now, it’s worth noting Stock Advisor’s the average total return is 975% – outperformed the market by 206% for the S&P 500. Don’t miss the latest top 10 list, available via Stock Advisorand join an investment community built by individual investors for individual investors.

See 10 stocks »

*Stock Advisor returns from 7th May 2026.

Daniel Foelber has no position in any of the stocks mentioned. The Motley Fool has positions and recommends Costco Wholesale and Walmart. The Motley Fool recommends SAP. The Motley Fool has a policy of disclosure.

Meet the 5.7%-Yielding Value Stock That’s on Track to Become A Dividend King Next Year was originally published by The Motley Fool.