Apple’s PE ratio is up more than 7% this year. Clorox is down 14%. Apple still trails.
In a Mad Money rant three weeks ago, CNBC’s Jim Cramer made the case for valuing Apple not as just another FANG, but as one of the great consumer products companies of all time—alongside Proctor & Gamble, Pepsi and Colgate.
Cramer is particularly fond of Clorox, a company with a long (41 year) history of dividend increases and a $3 billion stock buyback program. At week’s end it was trading at a price-to-earnings ratio of 23.6, just below the S&P 500 average (24.7).
Apple’s PE is on the rise—buoyed by strong earnings and a massive ($100 billion) stock buyback—and last week reached its high for the year: 19.7.
Cue the fever charts (year to date):
PE Ratio Growth:
Click to enlarge.
My take: This is crazy. Apple has mountains of cash, a history of disruptive innovation and Services revenues that are growing at 30% a year. Can Clorox say that about any of its business units?