Apple: Still cheaper than Clorox

August 20, 2018 by Steven M. Peters

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 Ratios: 

clorox

PE Ratio Growth:

clorox

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?

Essential Tips for Investing: Sponsored

A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.