Conservative investors seeking stability and reliable dividends need look no further than Kimberly-Clark (KMB).
The consumer staples giant produces a broad range of essential products, from tissues and toilet paper to diapers and tampons, under well-known brands such as Kleenex, Kotex, Scott and Huggies.
Kimberly-Clark has a truly global presence, with top-two market share positions in 70 countries. While its mature, well-established nature limits growth opportunities, it also provides stability. The company boasts an investment-grade credit rating of A from S&P Global, reflecting its sound financial health.
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This stability has translated into consistent income for shareholders. Kimberly-Clark has increased its dividend for 58 consecutive years, showcasing its commitment to returning value to investors.
With a current dividend yield of 3.5%, well above the S&P 500’s 1.2% average, the company offers attractive income potential. The next quarterly dividend of $1.22 per share has an ex-dividend date of Dec. 5, and investors can expect another increase in the first quarter of 2025.
Kimberly-Clark’s earnings have been solid this year, but declining sales present a concern. On Oct. 22, the company reported third-quarter earnings of $1.83 per share, exceeding analysts’ expectations of $1.70.
However, revenue came in slightly below forecasts at $5 billion, representing a 4% year-over-year decline. Notably, 3% of the sales drop was due to foreign currency translation, and the remaining 1% resulted from the divestiture of the K-C Professional Personal Protective Equipment business in July.
To enhance efficiency, Kimberly-Clark is exploring divestitures of certain international assets. The first potential sale is its international tissue business, estimated to be valued at approximately $4 billion. This move could help the company refocus on core operations and improve profitability.
The dividend stock is currently forming a flat base, having recently climbed above its 50-day and 200-day moving averages. A 149.31 buy point can be identified in IBD MarketSurge charts.
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