If you are interested in cashing in on The Clorox Company’s (NYSE:CLX) upcoming dividend of $0.84 per share, you only have 3 days left to buy the shares before its ex-dividend date, 23 January 2018, in time for dividends payable on the 09 February 2018. What does this mean for current shareholders and potential investors? Below, I will explain how holding Clorox can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes. Check out our latest analysis for Clorox

5 checks you should do on a dividend stock

Whenever I am looking at a potential dividend stock investment, I always check these five metrics:

• Does it pay an annual yield higher than 75% of dividend payers?

• Has it paid dividend every year without dramatically reducing payout in the past?

• Has it increased its dividend per share amount over the past?

• Is it able to pay the current rate of dividends from its earnings?

• Will it have the ability to keep paying its dividends going forward?

How well does Clorox fit our criteria?

The company currently pays out 59.02% of its earnings as a dividend, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a payout ratio of 58.85%, leading to a dividend yield of 2.49%. Furthermore, EPS should increase to $5.81. Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. In the case of CLX it has increased its DPS from $1.6 to $3.36 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. These are all positive signs of a great, reliable dividend stock. Relative to peers, Clorox generates a yield of 2.35%, which is high for household products stocks but still below the market’s top dividend payers.

Next Steps:

With this in mind, I definitely rank Clorox as a strong dividend stock, and makes it worth further research for anyone who likes steady income generation from their portfolio. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. There are three pertinent factors you should further research:

1. Future Outlook: What are well-informed industry analysts predicting for CLX’s future growth? Take a look at our free research report of analyst consensus for CLX’s outlook.

2. Valuation: What is CLX worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether CLX is currently mispriced by the market.

3. Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.

To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.