Spectrum Brands (NYSE:SPB) and Clorox (NYSE:CLX) Critical Contrast

Spectrum Brands (NYSE:SPB) and Clorox (NYSE:CLX) are both consumer staples companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, dividends, valuation, earnings and profitability.

Institutional & Insider Ownership

78.5% of Clorox shares are owned by institutional investors. 4.5% of Spectrum Brands shares are owned by company insiders. Comparatively, 0.6% of Clorox shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility & Risk

Spectrum Brands has a beta of 0.65, meaning that its stock price is 35% less volatile than the S&P 500. Comparatively, Clorox has a beta of 0.56, meaning that its stock price is 44% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Spectrum Brands and Clorox, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Spectrum Brands	0	4	3	0	2.43
Clorox	4	13	0	0	1.76

Spectrum Brands presently has a consensus target price of $98.83, suggesting a potential upside of 16.43%. Clorox has a consensus target price of $101.40, suggesting a potential upside of 24.03%. Given Clorox’s higher probable upside, analysts clearly believe Clorox is more favorable than Spectrum Brands.

Valuation & Earnings

This table compares Spectrum Brands and Clorox”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Spectrum Brands	$2.81 billion	0.70	$99.70 million	$3.28	25.88
Clorox	$6.72 billion	1.47	$587.00 million	$4.82	16.96

Clorox has higher revenue and earnings than Spectrum Brands. Clorox is trading at a lower price-to-earnings ratio than Spectrum Brands, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Spectrum Brands and Clorox’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Spectrum Brands	2.76%	10.06%	5.49%
Clorox	8.74%	522.23%	10.64%

Dividends

Spectrum Brands pays an annual dividend of $1.88 per share and has a dividend yield of 2.2%. Clorox pays an annual dividend of $5.00 per share and has a dividend yield of 6.1%. Spectrum Brands pays out 57.3% of its earnings in the form of a dividend. Clorox pays out 103.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Spectrum Brands has increased its dividend for 1 consecutive years and Clorox has increased its dividend for 47 consecutive years. Clorox is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Clorox beats Spectrum Brands on 11 of the 17 factors compared between the two stocks.

About Spectrum Brands

Spectrum Brands Holdings, Inc. operates as a branded consumer products and home essentials company in North America, Europe, the Middle East, Africa, and Asia-Pacific regions. It operates through three segments: Home and Personal Care; Global Pet Care; and Home and Garden. The Home and Personal Care segment provides home appliances under the Black & Decker, Russell Hobbs, George Foreman, PowerXL, Emeril Legasse, Copper Chef, Toastmaster, Juiceman, Farberware, and Breadman brands; and personal care products under the Remington brand. The Global Pet Care segment provides dog and cat chews, treats, wet and dry foods, dog and cat clean-up and food, training, health and grooming, indoor birds, and small animal food and care products under the Good'n'Fun, DreamBone, GOOD BOY, SmartBones, IAMS, EUKANUBA, Nature's Miracle, FURminator, Dingo, 8IN1, Meowee!, and Wild Harvest brands. This segment also offers aquarium kits, stand-alone tanks, and aquatics equipment and consumables under the Tetra, Marineland, Instant Ocean, GloFish, and OmegaSea brands. The Home and Garden segment provides outdoor insect and weed control solutions, and animal repellents under the Spectracide, Garden Safe, Liquid Fence, and EcoLogic brands; household pest control solutions under the Hot Shot, Black Flag, Real-Kill, Ultra Kill, The Ant Trap, and Rid-A-Bug brand names; household surface cleaning, maintenance, and restoration products, including bottled liquids, mops, wipes, and markers under the Rejuvenate brand name; and personal-use pesticides and insect repellent products under the Cutter and Repel brands. The company sells its products through retailers, e-commerce and online retailers, wholesalers, and distributors. Spectrum Brands Holdings, Inc. was founded in 1906 and is headquartered in Middleton, Wisconsin.

About Clorox

The Clorox Company manufactures and markets consumer and professional products worldwide. It operates through four segments: Health and Wellness, Household, Lifestyle, and International. The Health and Wellness segment offers cleaning products, such as laundry additives and home care products primarily under the Clorox, Clorox2, Scentiva, Pine-Sol, Liquid-Plumr, Tilex, and Formula 409 brands; professional cleaning and disinfecting products under the CloroxPro and Clorox Healthcare brands; professional food service products under the Hidden Valley brand; and vitamins, minerals and supplement products under the RenewLife, Natural Vitality, NeoCell, and Rainbow Light brands in the United States. The Household segment provides cat litter products under the Fresh Step and Scoop Away brands; bags and wraps under the Glad brand; and grilling products under the Kingsford brand in the United States. The Lifestyle segment offers dressings, dips, seasonings, and sauces primarily under the Hidden Valley brand; natural personal care products under the Burt's Bees brand; and water-filtration products under the Brita brand in the United States. The International segment provides laundry additives; home care products; water-filtration systems; digestive health products; grilling products; cat litter products; food products; bags and wraps; natural personal care products; and professional cleaning and disinfecting products internationally primarily under the Clorox, Ayudin, Clorinda, Poett, Pine-Sol, Glad, Brita, RenewLife, Ever Clean and Burt's Bees brands. It sells its products primarily through mass retailers; grocery outlets; warehouse clubs; dollar stores; home hardware centers; drug, pet, and military stores; third-party and owned e-commerce channels; and distributors, as well as a direct sales force The Clorox Company was founded in 1913 and is headquartered in Oakland, California.