WD-40 Company (WDFC), The Clorox Company (CLX): Enhance Your Portfolio With These Stocks

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If the best offense is having a great defense, then the following companies are at the top of the game. While sports might frown upon chemically enhanced athletes, chemically enhanced portfolios are a different story. Some of the best stocks you can ever own long-term with little risk are the ones that produce products you see and use everyday no matter the economic conditions or where you live.

The Clorox Co (NYSE:CLX)

This one’s omnipresent

Water Displacement 40th formula was the creation of Rocket Chemical in 1953. A company, whose product was originally used to protect the outer skin of missiles from rust and corrosion and introduced as an OTC stock in 1973, WD-40 Company (NASDAQ:WDFC) has become one of the best examples of the value of brand name. Twenty years ago, WD-40 was found to be in four out of five American households with sales of 1 million cans a week. WD-40’s refusal to patent their classic formula has only shown that also realize the value of their brand.

The stock is up over 115% the past 10 years, not including its 2.20% dividend. Quarterly profit margins are increasing with the average of the past five years being 10.26%. Second-quarter 2013 earnings showed that net sales and net income increased 6% and 23%, respectively, year-to-date.

The outlook for WD-40 Company (NASDAQ:WDFC) goes well beyond its core product. The growth in the company lies in its other household cleaning brands, stain removers, deodorizers, and its expansion across the world. While there was a 41% decline in operating income in the American segment last quarter, Europe and Asia-Pacific segments increased 26% and 38%, respectively. WD-40 continues to improve the product by improving the way it is dispersed through different cans, nozzles, pens, and triggers.

The true value in the WD-40 Company (NASDAQ:WDFC) brand is that most people don’t know how much a can of WD-40 should cost. While a can lies around in nearly 90% of households in America, it is seldom used, seldom bought more than once a year, and this gives the company huge pricing leverage to increase the price over time. This also explains the decline in income by the American segment. Nearly all Americans own WD-40 Company (NASDAQ:WDFC).

Another one not to miss

As a global manufacturer of consumer and professional products like Pine-Sol wood cleaner, Glad bags, Kingsford charcoal, Hidden Valley and KC Masterpiece dressing, and Brita water filters, The Clorox Company (NYSE:CLX) is much more than bleach. This diverse portfolio of unrelated products owned by Clorox all hold the number one or two market share positions in their categories.

Clorox is up 88% the last decade, not including its 3% and annually rising dividend, while its average quarterly margin in the last five years is also 10.26%. Its strength as a stock, though, is the ability to not crumble during rough market conditions. During the recent Great Recession, the stock fell to just two-thirds of its peak share price before the recession began. What this means is that people will always need bleach – or at least one of The Clorox Company (NYSE:CLX)’s products – no matter the economic environment.

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