Church & Dwight Co., Inc. (NYSE:CHD) and The Clorox Company (NYSE:CLX) look quite different when it comes to dividends. CHD offers a much lower yield, but its dividend is growing faster. Clorox gives investors far more income today, though the company has been much more conservative with recent increases.
Church & Dwight pays $0.3075 per share each quarter and continues to maintain its long dividend track record. The company also has a portfolio of familiar brands, including Arm & Hammer and Trojan, which gives it a fairly stable business base. Church & Dwight Co., Inc. (NYSE:CHD) raised its dividend by 4.2% earlier this year.
The yield may be low, but investors focused on growing their income can look at that increase as a sign that the payout is still moving in the right direction. At $101.24 per share, as of the close of August 12, CHD's annualized dividend of $1.23 gives the stock a yield of about 1.22%. That is not enough to make the stock a major income play today.
What helps is the earnings outlook. Management expects organic sales to grow 3% to 4% and adjusted EPS to rise 5% to 8% for the full year. If the company hits those targets, it should have room to keep increasing the dividend.
That makes CHD more of a long-term dividend-growth investment. Investors are giving up income today in exchange for the potential to build a larger income stream as earnings and the dividend grow. The Clorox Company (NYSE:CLX) is a different story.
Investors get a much higher starting yield, and the board recently raised the quarterly dividend to $1.25 per share from $1.24. The increase also extended the company's annual dividend growth streak to 49 consecutive years. At $105.76 per share, Clorox's $5.00 annualized dividend gives the stock a yield of about 4.73%.
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