Key Takeaways
- Clorox yields 6.2% and J.M. Smucker yields 3.9%, so $10,000 pays $620 a year in Clorox and $390 in Smucker.
- Clorox’s dividends took 149% of its free cash flow over the twelve months to June 30, 2026, and consensus puts that at 71% for fiscal 2027.
- Smucker’s dividends took 29% of its free cash flow over the twelve months to July 31, 2026, and consensus puts that at 40% for fiscal 2027.
- The number to watch is Clorox’s fiscal 2027 free cash flow, which analysts put at $881 million.
Any retiree hunting for dividend income on the grocery shelf is going to run into Clorox (CLX). It yields 6.2%, so $10,000 invested today pays $620 a year.
The catch: over the twelve months to June 30, 2026, Clorox paid out 149% of its free cash flow in dividends.
That makes J.M. Smucker (SJM) an interesting foil. It yields 3.9%. Both are fighting volatile commodity costs. So which is the better pick for a retiree who needs the check to keep coming?
| Metric | Clorox (CLX) | J.M. Smucker (SJM) |
|---|---|---|
| Dividend yield | 6.2% | 3.9% |
| Dividend growth, fiscal 2021–2026 | 2.0% a year | 4.1% a year |
| Dividend record (company’s words) | Raised “annually for a decade” | Raised for the “25th consecutive fiscal year” |
| Cash dividend payout ratio, TTM | 149% (to June 30, 2026) | 29% (to July 31, 2026) |
| Cash dividend payout ratio, forward (fiscal 2027) | 71% | 40% |
| Net debt / EBITDA (LTM) | 4.3x | 2.9x |
| Interest coverage (LTM) | 6.8x | 4.7x |
Clorox: a big check, stretched thin
Clorox’s fiscal 2026, the year to June 30, was a tough one. Net sales fell 5% from fiscal 2025, to $6.72 billion. Household and Lifestyle sales shrank as they lapped extra shipments tied to its ERP switch.
The cash flow shows the strain.
Dividends paid rose from $412 million in fiscal 2017 to $602 million in fiscal 2026. Free cash flow swung from year to year and fell short of the dividend in fiscal 2022, 2024 and 2026. Fiscal 2026’s $405 million was the lowest of the ten years charted.
Management calls the elevated payout “something more transitory as we rebuild our gross margin and not something structural.” CFO Luc Bellet said on the Aug. 3 call that “our commitment to support the dividend has not changed.” Consensus has fiscal 2027 free cash flow at $881 million, more than double fiscal 2026’s, which would bring the cash dividend payout ratio down to a manageable 71%. Only four analysts make that estimate, though, and last year’s final consensus missed the actual by 18%.
Smucker: the smaller check, well-covered
Smucker’s dividend doesn’t need a rebound to be paid. In the first quarter of fiscal 2027, ended July 31, 2026, net sales were $2.2 billion, 5% above the same quarter a year before. Adjusted EPS of $3.24 was 71% above it, and that includes a $0.84 benefit from tariff refunds. Uncrustables posted double-digit volume growth and Café Bustelo’s net sales grew 23%, while Sweet Baked Snacks shrank 7%.
Free cash flow topped dividends paid in every year charted, and the cash dividend payout ratio peaked at 68% in fiscal 2024. Over the twelve months to July 31, 2026, the ratio is a very well-covered 29%. Consensus puts fiscal 2027 at 40%, close to management’s guidance of about $1.1 billion in free cash flow.
The main risk is the top line: management expects fiscal 2027 net sales to fall 1% to 2%.
So which dividend wins?
For retirees, J.M. Smucker is the better dividend stock. Retirees seeking income want a check they can count on, and what decides it is coverage. Smucker’s dividend is well-covered on both trailing and forward free cash flow, and its balance sheet is already on the mend.
Leverage jumped from 1.9x in fiscal 2023 to 4.3x in fiscal 2024, after the Hostess deal. It stood at 3.5x at the end of fiscal 2026, and TIKR’s latest twelve-month figure is 2.9x. CFO Tucker Marshall said “we remain committed to the quarterly dividend,” adding that “we now have the flexibility to begin contemplating share repurchases as we move forward.”
That isn’t to say Clorox’s dividend is in danger. It pays the bigger check. At the pace each dividend grew in fiscal 2026, $10,000 in Clorox would still pay about $718 in year 10, against about $460 from Smucker. Even at their 5-year rates, Smucker’s income wouldn’t catch up until about 2049. It’s just that Clorox’s check, at 149% of trailing free cash flow, depends on a recovery that hasn’t shown up yet. Smucker’s cash flow already pays for its own.
Of course, Clorox’s next few quarters could change that. If its free cash flow comes in near the $881 million analysts expect for fiscal 2027, the bigger check gets a lot easier to trust.
So what is J.M. Smucker stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
