The Procter & Gamble Company (PG), The Clorox Co (CLX): Two Household & Personal Care Stocks to Buy, 1 to Hold

Such was the case again this quarter as the combination of strong base-period sales of charcoal (in F3Q12 due to warmer weather and early merchandising by a large retailer) and a colder F3Q13 (a -20% decline in charcoal volume in the month of March alone) led to a -1.5 point drag on total company volumes (ultimately creating an easier comp in F3Q14).

In any event, with The Clorox Co (NYSE:CLX) shares now trading at 19.3x the 2013 EPS estimate of $4.41, inline with its large-cap household and personal care peers despite below peer earnings growth, it seems difficult to see much appreciation from here.

Newell is rated as a buy

On an overall note, with better-than-expected organic growth in two of the company’s three “win bigger” businesses and the management reaffirming guidance for 2013 despite dilution from non-core disposals, Newell Rubbermaid Inc. (NYSE:NWL) is already demonstrating the viability of its global growth game plan.

Specifically, early investments in the segments and geographies that matter most are accelerating growth while flexibility from project renewal savings provides a cushion to the bottom line. It is this increased visibility on the bottom line coupled with the revenue potential embedded in the company’s long-term strategy that keeps the Street bullish on Newell Rubbermaid Inc. (NYSE:NWL).

Final word

As we can see, despite a poor 1Q 2013, the CHPC space has some exciting companies and investing themes. I remain bullish on The Procter & Gamble Company (NYSE:PG) given the return of its ex-CEO. Newell Rubbermaid Inc. (NYSE:NWL)’s Global Growth Plan makes me bullish on this company too. However, expensive valuations for The Clorox Co (NYSE:CLX) keeps me on the sidelines.

Zain Abbas has no position in any stocks mentioned. The Motley Fool recommends Procter & Gamble. Zain is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article 2 Household & Personal Care Stocks to Buy, 1 to Hold originally appeared on Fool.com is written by Zain Abbas.

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