Monday, January 25, 1999

P&G's always good bet, but analyst takes real shine to Clorox

Des Moines Register

        Ever thought of looking around the house for investment ideas?

        Think of firms that provide some of life's essential products — everything from soap to shampoo, deodorant to diapers, toothpaste to toilet paper.

        If you want to invest in the company whose products probably take up the largest share of kitchen and bathroom shelf space, you buy Procter & Gamble common stock that traded on the New York Stock Exchange for about $87 a share.

        But if you want to invest in a company that might bring a nicer bulge in the value of your portfolio in the years ahead, go for Clorox. It trades around $110 a share on the NYSE.

        According to Information Resources InfoScan Review, Procter & Gamble products dominate markets such as liquid and powder laundry detergents (Tide, Era, Cheer), automatic and liquid dish detergent (Cascade, Dawn), paper towels (Bounty), facial makeup (Cover Girl Clean), shampoo (Pantene Pro V, Pert Plus, Head & Shoulders), deodorant (Secret, Sure), sanitary napkins (Always), and toilet tissue (Charmin).

        Prudential Securities analyst Carol Warner Wilke said she is “positive” on the long-term outlook for Procter & Gamble and recommends that investors accumulate the company's shares.

        But she reserves her top praise for the stock of Clorox, which she calls her “single best idea” in the household products and cosmetics industry.

        She has a “strong buy” rating on the expensive stock, she said, because the company's volume growth continues to be at least twice that of other consumer products companies, and it has been posting the “highest-quality” sales and earnings results.

        Clorox, once a unit of P&G, has around 40 percent of the dollar and volume share of the dry bleach market and 60 percent of the liquid bleach market.

        Other Clorox products include Formula 409, Pine-Sol, Black Flag and Combat insect control products and Armor All automobile products.

        “Eighty-five percent of Clorox's brands hold the No. 1 or 2 market share position,” Ms. Wilke said.


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- P&G's always good bet, but analyst takes real shine to Clorox