| | | CLX. From what you say, I would not sell. If it were me though, I have different goals/objectives and I'd be taking profits. I'd like to believe all the way up to where I've only a few shares left now.
Anyway... CLX has profits every year. Median p/e over past ten years is 21.6 vs. current at 30.31 in a range of 13.4 to 30.4. So half the time roughly, the p/e is above 21.6 and half below. Yahoo analysts say next year's (2021) earnings will be $6.54 (average estimate of 15 analysts) vs 2020 estimate of $6.60.
Assuming CLX doesn't stay at it's relatively high p/e, but instead drops back to where it is half the time, you would see a stock price of $6.54 x 21.6 about $141/sh. at some point. But maybe, since things are really good, but apparently not really improving in 2021 over this year (according to Yahoo average estimated earnings) maybe the stock will drop back just a little (assuming it would drop back at all) - say at 25x earnings. That's still high, but also what's been seen in past couple of years. So you'd see the stock at $163.
Say you sell now. Stock's at $206. You have capital gains taxes -- I don't know your tax rates, but say 15%. So you'd wind up with .85x $205 = about $174/sh. $174---$163... slop in both numbers though to conclude maybe a savings of $11/sh. Too tough for me to conclude definitively. Stocks rise and fall and some become overvalued. And some so overvalued and popular or in demand, that they pull you into selling. Is it at that point now? I don't know. $206 vs. maybe $163. Could we call the stock 43/163 or 25% overvalued? Is that too much? The stockholder has to make that decision.
I looked at both your alternative choices. Didn't one of them have a dividend yield that was less than CLX? If you sell, and invest in that one, then the dividend $ you'll be getting will be even less because you only would have .85 of $205 per share to invest.
About CLX. I never could understand it. I can't get past what I assume is a fact: bleach is bleach. Why is CLX stock so expensive? Where are the competitors who should be flooding the market with this chemical. Otoh, I've believed this for years, and I've always been wrong. Maybe most likely that ten years from now CLX will still dominate and still be raising its dividend. Who knows? |
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