Yesterday, Clorox announced a 9% increase in it's dividend, which now yields about 3.4% -> very nice.
CLX also updated their 2010 targets:
-- 1-2 percent sales growth
-- 50-100 basis points gross margin improvement
-- Diluted EPS in the range of $4.00-$4.15
That $4.15 equates to a forward PE of 13.5 -> I would not expect to see this high-quality stock trade at a lower multiple, pushing it's dividend yield above 4%. As a general rule of thumb, companies that have a dividend yield of 3% and higher should by nature have a Free Cash Flow yield well above that, making the dividend yield a great indicator for us FCF-chasers.
Targets for 2013:
-- Sales growth target of 3-5 percent, excluding acquisitions (unchanged)
-- EBIT (earnings before interest and taxes) margin growth increased to 75-100 basis points from the previously communicated range of 50-75 basis points, due to anticipated continuing strong cost savings and a more moderate commodity cost environment.
-- Double-digit annual economic profit growth (unchanged)
-- Annual free cash flow target of 10-12 percent of sales (unchanged)
Here's what I see as the company's possible market valuation. Looks cheap to me, based on Free Cash Flow Yield(FCFY).

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