The Zacks Analyst Blog Highlights: Clorox, Ecolab, Church & Dwight, Procter & Gamble and Westamerica Bancorp

The Zacks Analyst Blog Highlights: Clorox, Ecolab, Church & Dwight, Procter &
                        Gamble and Westamerica Bancorp

PR Newswire

CHICAGO, Feb. 6, 2013

CHICAGO, Feb. 6, 2013 /PRNewswire/ announces the list of stocks
featured in the Analyst Blog. Every day the Zacks Equity Research analysts
discuss the latest news and events impacting stocks and the financial markets.
Stocks recently featured in the blog include The Clorox Company (NYSE:CLX),
Ecolab Inc. (NYSE:ECL), Church & Dwight Co. Inc. (NYSE:CHD), Procter & Gamble
Company (NYSE:PG) and Westamerica Bancorp. (Nasdaq:WABC).


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Here are highlights from Tuesday's Analyst Blog:

Clorox Shares at All-Time High

Shares of The Clorox Company (NYSE:CLX) hit an all-time high of $80.86 on
Monday, Feb 4, just after the company reported a better-than-expected
second-quarter results and an upbeat outlook for fiscal 2013. This Zacks Rank
#3 (Hold) global consumer product company eventually closed at its highest
mark of $79.72 yesterday, representing a healthy return of 18.1% over the last
one year. Average volume of shares traded over the last 3 months stands at
approximately 923,319.

Drivers that Triggered Momentum

An impressive record of beating the quarterly earnings expectations, a
positive fiscal 2013 outlook and a decent dividend yield are the factors that
enabled the shares of Clorox to reach a new high.

With respect to earnings surprise, Clorox has been beating the Zacks Consensus
Estimate for the last 9 quarters, most recently topping it by 11.1% in the
second quarter of fiscal 2013.

Yesterday, Clorox came up with impressive earnings and sales comparisons for
the second quarter of fiscal 2013. The company's adjusted earnings of 90 cents
per share jumped approximately 13.9% from the year-ago quarter's earnings of
79 cents and beat the Zacks Consensus Estimate of 81 cents.

The company's earnings benefited from improvements in revenues as well as
gross margins, offset by higher selling and administration expenses as it
continues to invest in information technology (IT) systems.

Net sales elevated 8.5% year over year to $1,325 million from $1,221 million
in the year-ago quarter, mainly due to improved prices and volumes. Moreover,
total revenue came in ahead of the Zacks Consensus Estimate of $1,270 million.
Total volume increased 5% from the comparable quarter last year.

Bolstered by better-than-expected quarterly performance, Clorox raised its
sales growth forecast to 3%–5% for fiscal 2013 from 2%–4% forecasted earlier,
driven by better category-wise performances, market share gains and further
product innovation across its brands.

The company expects operating income margin to expand by 25 to 50 basis points
in fiscal 2013, on the back of strong cost savings, the benefit of price
increases and flat commodity costs forecasts. Further, the company now
anticipates annual earnings of $4.25–$4.35 per share in fiscal 2013, up from
the previous guidance range of $4.20–$4.35.

Clorox is also known for its shareholder friendly moves. Since 1983, the
company has increased its dividend from 1.875 cents to 64 cents. This
currently yields a solid 3.21%, while the company has a payout ratio of 59%.
We believe that its continuous dividend payments and increments reflect the
growth potential of its earnings and cash flow generation capabilities.

Besides Clorox, other consumer products companies like Ecolab Inc. (NYSE:ECL),
Church & Dwight Co. Inc. (NYSE:CHD) and Procter & Gamble Company (NYSE:PG)
also focus on improving shareholder value by paying regular quarterly

Stock's Key Indicators

Clorox currently trades at a forward P/E of 18.52x, slightly above the peer
group average of 18.47x. Again, its price-to-sales ratio of 1.86 is in line
with the peer group average. Moreover, the company's return-on-investment
(ROI) and return-on-asset (ROA) are 32.2% and 12.5%, respectively, which are
significantly higher than the peer group average. The company's strong
fundamentals are well supported by its long-term estimated EPS growth rate of

Westamerica Remains Underperform

On Feb 4, 2013, we reiterated our long-term recommendation on Westamerica
Bancorp. (Nasdaq:WABC) at 'Underperform'. This reflects the company's dismal
fourth-quarter results, which went down both sequentially and on a
year-over-year basis.

Why Underperform?

Westamerica's fourth-quarter earnings of 70 cents per share declined from the
prior-quarter earnings of 73 cents and the year-ago earnings of 77 cents. The
results were adversely impacted by sluggish top-line growth, partially offset
by lower operating expenses. However, improving credit quality and stable
capital ratios were the tailwinds for the quarter.

Following the fourth-quarter results, the Zacks Consensus Estimate for 2013
has gone down 1.8% to $2.75 per share. Likewise, the Zacks Consensus Estimate
for 2014 has also declined (down 1.4% to $2.77 per share). With the Zacks
Consensus Estimates for both 2013 and 2014 going down, the company now has a
Zacks Rank #4 (Sell).

Further, Westamerica's net interest margin (NIM) has been falling over the
last several quarters owing to the challenging economic environment. Sluggish
economic recovery and the Federal Reserve's decision to keep short-term
interest rates low through mid-2015 are expected to keep NIM under pressure
going forward.

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