Analyzing Henkel AG & Co. KGaA (OTCMKTS:HENOY) and Clorox (NYSE:CLX)

Clorox (NYSE:CLX) and Henkel AG & Co. KGaA (OTCMKTS:HENOY) are both consumer staples companies, but which is the better stock? We will contrast the two companies based on the strength of their profitability, institutional ownership, dividends, risk, earnings, analyst recommendations and valuation.

Analyst Ratings

This is a breakdown of current ratings for Clorox and Henkel AG & Co. KGaA, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Clorox	5	12	0	0	1.71
Henkel AG & Co. KGaA	0	0	0	0	0.00

Clorox currently has a consensus price target of $102.40, indicating a potential downside of 4.30%. Given Clorox’s stronger consensus rating and higher probable upside, analysts clearly believe Clorox is more favorable than Henkel AG & Co. KGaA.

Profitability

This table compares Clorox and Henkel AG & Co. KGaA’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Clorox	8.74%	522.23%	10.64%
Henkel AG & Co. KGaA	N/A	N/A	N/A

Institutional and Insider Ownership

78.5% of Clorox shares are owned by institutional investors. Comparatively, 1.2% of Henkel AG & Co. KGaA shares are owned by institutional investors. 0.6% of Clorox shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Clorox and Henkel AG & Co. KGaA”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Clorox	$6.72 billion	1.93	$587.00 million	$4.82	22.20
Henkel AG & Co. KGaA	N/A	N/A	N/A	$6.35	3.50

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

Dividends

Clorox pays an annual dividend of $5.00 per share and has a dividend yield of 4.7%. Henkel AG & Co. KGaA pays an annual dividend of $0.88 per share and has a dividend yield of 4.0%. 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. Henkel AG & Co. KGaA pays out 13.9% of its earnings in the form of a dividend. 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 Henkel AG & Co. KGaA on 11 of the 13 factors compared between the two stocks.

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.

About Henkel AG & Co. KGaA

Henkel AG & Co. KGaA, together with its subsidiaries, engages in the adhesive technologies and beauty care, and laundry and home care businesses worldwide. It operates in two segments, Adhesive Technologies and Consumer Brands segments. The company offers adhesives, sealants, and functional coatings for various business areas, including packaging and consumer goods; mobility and electronics; and craftsmen, construction, and professional industries. It also provides hair styling, hair coloring, and hair care products; and body products, as well as distributes its products through brick-and-mortar stores, hair salons, and digital channels. In addition, the company offers heavy-duty and specialty detergents, fabric softeners, laundry performance enhancers, and other fabric care products; hand and automatic dishwashing products; cleaners for bathroom and toilet applications; household, glass, and specialty cleaners; and insect control products. The company was founded in 1876 and is headquartered in Düsseldorf, Germany.