We recently published a list of 10 Defensive Dividend Stocks To Buy During Market Sell Off. In this article, we are going to take a look at where The Clorox Company (NYSE:CLX) stands against other defensive dividend stocks to buy during market sell off.
The importance of defensive dividend stocks only becomes clear when the broader market is taking a hit. The S&P is down nearly 8% in a month while Nasdaq has lost over 11.41%. Investors are wondering how to protect themselves from volatility and the answer lies in defensive stocks.
Here is a key distinction investors must understand. Growth stocks rely on price appreciation to generate shareholder returns, something that is hard to achieve when the broader market is facing a severe sell-off. Dividend stocks, on the other hand, became more attractive. They not only help reduce the volatility but as their price goes down, their yield becomes more attractive.
We therefore decided to identify the best stocks for such a scenario. To come up with the list of 10 defensive dividend stocks to buy during a market sell-off, we only considered stocks belonging to the Consumer Defensive sector with a market cap of at least $2 billion and a dividend yield of at least 3%.
A team of professionals prepping for a training seminar, using professional cleaning products produced by the company.
The Clorox Company (NYSE:CLX)
The Clorox Company (NYSE:CLX) is the marketer and manufacturer of professional and consumer products. The company operates in the Household, International, Health and Wellness, and Lifestyle segments. A healthy 3.32% dividend yield means that, much like its products, the company’s stock is always in demand.
CLX stock tanked on its recent earnings report, which is what makes the opportunity so attractive. Since the cyber attack in 2024, Clorox (NYSE:CLX) has not only regained the market share it lost to competitors but has also improved its margins. This momentum will likely translate to a bull rally sooner rather than later.
2025 sales growth is expected to come in between 4% and 7%, with most of it coming in the later half of the year. 2026 is where the margin expansion should start to kick in according to the management. This is the result of productivity improvements as well as enhanced cost saving measures that the company plans to take. The CFO’s words reflected this factor on the earnings call:
We feel very confident in our ability to rebuild gross margins to 44% this year and expand EBIT margins by 25 to 50 basis points annually starting FY2026.
Overall, CLX ranks 4th on our list of defensive dividend stocks to buy during market sell off. While we acknowledge the potential of CLX as a leading investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is as promising as CLX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
