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As a result, we consider the stock to be slightly overvalued at the present time. Kimberly-Clark: A Recession-Resistant Dividend Aristocrat. The company’s high level of recession-resistance is a big reason why this Dividend Aristocrat will continue to increase its dividend each year for many years. For the year, the S&P 500 is (somewhat amazingly) down just 3%. The Huggies brand has been responsible for a great deal of Kimberly-Clark’s growth over the past several decades, and this continues today. Dividend Payout Ratio = Total Dividends Paid / Free Cash Flow, Dividend Payout Ratio = $1.4 billion / $1.5 billion. Lastly, Kimberly-Clark stock has a current dividend yield of 3%. In 1st Quarter, 2020 earnings released on April 22nd, 2020 Kimberly Clark reported revenues of $5 billion and net income of $675 million, implying a net profit margin of 13.5%. 5 year average dividend growth rate of 4%. This is why we continue to favor the Dividend Aristocrats, a group of 65 stocks in the S&P 500 Index with 25+ consecutive years of dividend increases. KMB Stock has risen from a modest $16 in January 1990 to $139 as of June 2020. Kimberly Clark is a holding in the prestigious S&P 500 Dividend Aristocrats group having raised dividends for 47 consecutive years. Using the current stock price of $139 and dividing in to the expected earnings, we arrive at a forward price to earnings ratio of 18.5. Over the last decade, Kimberly Clark has grown revenues from $ in 2020 to $18.45 billion in 2019. Management has introduced a K-C Strategy Growth plan looking ahead to the company’s 150 year anniversary in 2022. For fiscal 2019, Kimberly Clark paid out $1.4 billion in dividends. For the year, the S&P 500 is (somewhat amazingly) down just 3%. These are 64 coveted stocks that have not only paid dividends for at least 25 consecutive years but have also grown them each year. In addition to organic revenue growth, Kimberly-Clark generated significant cost savings from the company’s ongoing cost reduction programs. This growth of 370 basis points in adjusted gross margin was achieved mainly due to cost savings of $125 million thanks to restructuring and FORCE program (Focus on Reducing Costs Everywhere). This indicates the stock The 5-year average dividend yield is 3.14% (see red-line in chart). Sales of personal products were up 4% in North America due to a mix of higher volumes, prices and product mix. In this article, we will discuss Kimberly Clark’s business operations and strategy, explore latest earnings results, dividend growth history, stock’s valuation and performance versus the S&P 500 and the S&P 500 Consumer Staples (XLP) index. Kimberly-Clark’s current dividend yield of 3.14% is 0% below its 5-year average. Personal Care is the top segment generating 49% of all sales at $9.1 billion. Yes, this performance was significantly better than the S&P 500 which dropped a cumulative 56%. Four young businessmen, John A. Kimberly, Havilah Babcock, Charles B. Clark and Frank C. Shattuck, … We expect the company to generate adjusted EPS growth of 4% per year, based on a combination of revenue growth, cost cuts, and share repurchases. During the great financial crisis of 2008, the KMB stock dropped from highs of $70 in June 2007 to $41 as of March 2009. Revenue increased 8% year over year from 2018’s reported sales of $4.6 billion. The company reports financial results in 3 operating segments. Kimberly-Clark has traded among dividend aristocrats for 46 years. The U.S. economy officially entered a recession in February, ending the longest economic expansion in its history. Kimberly-Clark is a Dividend Aristocrat with a time-tested business model, due in large part to its strong brand portfolio. Management attributes this growth due to significant shipments to support consumer stock-up due to Covid-19 Virus. Future earnings-per-share growth and dividends will offset the impact of overvaluation. The company’s strong brand portfolio has had a very large impact on the company’s ability to grow its profits (and dividends) for so many years. In times of economic uncertainty, high-quality dividend growth stocks become even more valuable. Based on our expected earnings-per-share of $7.45 for 2020, Kimberly-Clark stock trades for a price-to-earnings ratio of 19. Kimberly-Clark KMB 3.11% 47 Leggett & Platt LEG 4.88% 8 Linde PLC LIN 1.87% 27 Lowe's LOW 1.52% 45 McCormick MKC 1.37% 34 McDonald's MCD 2.68% 43 … Kleenex’s history began during the first World War. Kimberly Clark Stock, a 47 Year Dividend Aristocrat Kimberly Clark Stock is a member of the prestigious S&P 500 Dividend Aristocrats index. That makes … Kimberly-Clark (KMB) is a Dividend Aristocrat that has increased its dividend each year, for more than 40 years in a row. The 5-year average dividend yield is 3.14% (see red-line in chart). Kimberly-Clark is a Dividend Aristocrat with a time-tested business model, due in large part to its strong brand portfolio. In order to facilitate its dividend as a priority, the company might have to cut capital expenditures or share repurchases or both. In 2019, Kimberly Clark generated $18.45 billion in revenues. Finally, today’s list of stocks for January dividends also includes a Dividend Achiever. Find the latest dividend history for Kimberly-Clark Corporation Common Stock (KMB) at Nasdaq.com. This is not a very high expected rate of return, but the stock remains an attractive holding for dividend growth investors. Consumer tissue segment grew revenues by 7% due to higher pricing and lower volume. The Kimberly-Clark Corporation is a dividend aristocrat with 47 consecutive years of dividend growth. KMB Stock is a member of the S&P 500 Consumer Staples index. Economic data has improved recently, suggesting a moderate recovery, but much remains unknown as to where the economy goes from here. The next largest segment is Consumer Tissue generating 33% of all sales or $6 billion. Some consumer staples and utilities did well. To view the latest quote on KMB Stock Price, visit the company’s Investor Relations website and select “Stock Information.”, “The price of a commodity will never go to zero. Kimberly-Clark saw solid volume growth of 8% for the quarter, a reflection of the rising demand amid nationwide stay-at-home orders. According to the company, its products are used by 25% of the world’s population. While 2020 has been a challenging year for the U.S. economy, Kimberly-Clark has performed relatively well. This article is broken down in to sections, feel free to jump to the area that interests you. Free Cash Flow = Cash from Operations – Capital Expenditures, Free Cash Flow = $2.7 billion – $1.2 billion. High debt load of $7.7 billion leaving the company highly exposed to interest rate changes and currency fluctuations. To be included in this index, stocks must be indexed in the S&P 500 and have a minimum $3 billion market capitalization. The product was rebranded as Kleenex, and in 1924 Kleenex tissues were made available in the U.S. as a cold cream and makeup remover. Put differently, buying Kimberly-Clark stock instead of the S&P 500 Index will provide 50% higher dividend income. Source: Kimberly Clark Investor Presentation 2019. Lets calculate the dividend payout ratio for Kimberly Clark. I focus on Kimberly-Clark and put it on the watch list. When Kotex was marketed in 1921, it quickly gained mass appeal, as it was a highly-sought after alternative to cloth pads. Being a Consumer Staples company, Kimberly Clark should out perform during economic downturns. It operates through two consumer-facing segments that each house many popular brands: Personal Care and Consumer Tissue. Kimberly-Clark has provided investors with reliable income increases for decades. This increase in adjusted gross margin was made possible by total cost savings + restructuring of $425 million in 2019. The Kleenex brands sells a variety of products including facial tissue. Why One Dividend Aristocrat Has the Edge The advantage goes to P&G as the larger of the two behemoths in consumer staples has been posting stronger results of late. This yield is 100 basis points higher than the yield on the S&P 500 which stands at 2%. Consumers will still need these products even in recessions, which is why Kimberly-Clark has maintained such a long history of growth. The company has paid dividends for … In 2019, Kimberly Clark generated $2.7 billion in cash from operations and spent $1.2 billion in capital expenditures. Kimberly-Clark (KMB) was founded in 1872 and has grown into one of the largest manufacturers of tissue and hygiene products. It has paid a dividend for 82 years. Most aristocrats are done this week. This represents a compounded annual growth rate (CAGR) of. They are: Founded in 1872, the company has strong global brands including 5 billion dollar brands including Huggies, Kleenex, Kotex, Cottonelle and Scott. The company offers three unique variants of toilet paper: Cottonelle Ultra CleanCare, Cottonelle Ultra ComfortCare, and Cottonelle Ultra GentleCare. This plan includes growing sales organically between 1% to 3% annually, increasing earnings per share in mid single digits through restructuring efforts and share buybacks, and main top tier Return on Invested Capital. Skip to main content Market Activity CLOSE Market Activity Stocks Funds + … In the 2020 first quarter, Kimberly-Clark’s results beat expectations for sales as well as earnings-per-share. A Dividend Aristocrat has increased its dividend annually for at least 25 years in a row. The broader market has an average yield of ~2% right now. You can see the entire list of Dividend Aristocrats (along with important financial metrics like price-to-earnings ratios and dividend yields) by clicking on the link below: Click here to download your Dividend Aristocrats Excel Spreadsheet List now. This is the reason KMB stock trades at a slightly higher valuation of 18.5 times forward earnings versus it’s peer group at 18. However, during the housing boom years from 2003 to 2006, the company grew dividend at low double digits. Kimberly Clark is a Dividend Aristocrat. In a time of elevated uncertainty, risk-averse income investors would do well to focus on quality stocks such as the Dividend Aristocrats. This means Kimberly Clark’s stock valuation is close to its industry peers albeight slightly higher. Dividend Payout Ratio measures how much of a company’s free cash flow is paid out in the form of dividends. This could have a negative impact on shareholder returns. As a comparison, the S&P 500 currently trades at a forward PE of 22 times earnings. Trading on the New York Stock Exchange, Kimberly Clark has a $47.4 billion market capitalization and pays a juicy 3% dividend yield. Free cash flow is the cash a company generates from daily operating activities minus capital expenditures like investing in new plants or equipment. 47 years of growing dividends making this a dividend aristocrat stock and just 3 years away from becoming a Dividend King. Input costs were lower by $115 million for the quarter, driven by pulp pricing. This index trades at a forward price to earnings ratio of 18 times 2020 earnings. Volumes increased 8%, prices rose 1% and product mix improved by 1%. Kotex is a major feminine hygiene products brand. Earnings per share grew 28% year over year from 2019’s 1st quarter EPS of $1.66 per share to 1st quarter 2020 EPS of $2.13 per share. Kimberly-Clark Dividend The Kimberly-Clark dividend has been paid continuously since 1972 and increased for 48 consecutive years; qualifying the company as a Dividend Aristocrat, and Dividend Champion. When you invest in commodities futures, you are not buying a piece of paper that says you own an intangible of a company that can go bankrupt.”. And, Kimberly-Clark grows its dividend each year, which provides even greater income over time. Bloomberg Analysts’ Consensus estimates expect Kimberly Clark to earn $7.48 in earnings per share for 2020. Kimberly Clark has paid a dividend to shareholders for many decades without interruption. Here is what we like and don’t like about Kimberly Clark Stock. The company has multiple leading brands which have provided it with steady growth for decades. For example, diaper sales grew at a mid-single-digit pace in China in the most recent quarter. Like Kimberly-Clark, 3M is a Dividend Aristocrat, having raised its quarterly dividend 2% this year to $1.47 per share -- a yield of 3.57%. The aristocrats, ... 3M is a member of the elite S&P 500 Dividend Aristocrats index. Investors can expect Kimberly-Clark to remain highly profitable in 2020, despite the fact that the U.S. economy officially entered a recession in February. Kimberly-Clark raised its dividend by 5.4% in early 2017, marking its 45 th consecutive annual dividend increase. For full year 2019, Kimberly Clark reported $18.45 billion in revenues and earned a net income of $2.157 billion, implying a net profit margin of almost 12%. This article will delve more deeply into Kimberly-Clark’s 5 billion-dollar brands, as well as the company’s future growth outlook and whether the stock is a buy today. The company is targeting share repurchases between $700 to $900 million in 2020. This ... McDonald’s Stock is a member of the elite S&P 500 Dividend Aristocrats index. This number is low but we like this rate of growth which is conservative and in line with growth in earnings. It has raised its dividend for 44 years in a row. This simple reality has helped Kimberly-Clark’s financials remain intact so far in 2020. Kimberly Clark’s long dividend history easily makes the company a Dividend Aristocrat. Kimberly-Clark has increased its dividend for 48 consecutive years, making it a member of the Dividend Aristocrats. And, Kimberly-Clark is a time Cellucotton, the material used to make Kotex pads, was originally developed during World War I as a bandage. Emerson Stock is a member of the prestigious S&P 500 Dividend Aristocrats. Thanks for reading this article. All major product categories and geographic regions saw higher volumes in the first quarter. Kimberly Clark has grown its dividends for 47 consecutive years, just 3 years away from achieving the Dividend King status. This is slightly above the 10-year average valuation of the stock. What is the free cash flow? Adjusted earnings-per-share jumped 28% to $2.13 for the first quarter, compared with the same quarter last year. Kimberly Clark is a global consumer company that manufactures essential products used for living a quality and better life including diapers, baby wipes, paper towels, facial tissues, feminine and incontinence care among others. The company has grown its dividend at a compounded annual growth rate (CAGR) of 4% over the last 5 years. Forward Price to Earnings Ratio of 18.5 times earnings which makes this stock more expensive than its peers. 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