Recent Buy: Kimberly-Clark Corp (KMB)

ID-100426334-300x300 Recent Buy: Kimberly-Clark Corp (KMB)I added a new position to my portfolio with the purchase of Kimberly-Clark Corp (KMB)

10 shares @ $111.80 on 3/12/2018.

This increases my forward 12-month dividend income by $40 to a total of $5,194.46

I also updated my portfolio page to reflect the change.

 

 

My Thoughts

Kimberly-Clark is a company that was founded in 1872. They have operations all over the world and produces mostly paper-based consumer products. You may have heard a few of them. For example, KMB produces Kleenex, Kotex, Scott, Huggies disposable diapers and baby wipes to name a few.

As you can see from the list of products, the company has some very profitable brands that I am sure you have heard of. One thing that you may not know is that Kimberly-Clark has raised its dividend for an impressive 46 consecutive years. Here is the best part. People will continue to use the company products for at least the next 20 years or even more in my eyes.

This means that the company can continue to increase its dividend for another 20 or so years. This is a big reason why I bought into KMB. Also, the company sees earnings growth of 11% to 16% for 2018 vs 2017. However, CFRA sees earnings growth of 7% for the next three years. Either way, these are good news.

Currently, the company is attractively valued. It has a 5-year dividend yield average of 3.02%, and you can currently get it with a yield of 3.72%. It has a current PE of 16.7 with a forward PE of 14.5.

The only metric that concerns me the most is that the dividend payout ratio is slightly high at the moment with a ratio of 60.6%. Considers that this year full earnings guidance is expected to be 11% to 16%, this will lower the payout nicely.

The company has been conservative with its dividend growth. The 5-year dividend growth average is 6.5% and the most recent dividend increase was only 3.09%. I like the fact that they are being conservative right now since their payout ratios are relatively high compared to the previous years. However, base on how the company will be performing in the coming years, I expect dividend growth to be in the mid to high single-digit rate.

KMB is undervalued, and I recommend it a BUY at this time. I have a fair price of $119.95 for Kimberly-Clark.

Screen-Shot-2018-03-21-at-9.08.30-PM Recent Buy: Kimberly-Clark Corp (KMB)

Source: Fastgraphs.com

 

What do you think of the company? Plan on owning it? or why not?

 

Thanks for reading, and don’t forget to connect with me.

 

Image by Sira Anamwong at FreeDigitalPhotos.net

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Comments

  1. Voyage –

    Nice purchase and def. agree on the company. They will be around for a very long time, have products that are used everywhere – not to mention the bathroom stalls at most companies/places. Congrats on the purchase FV.

    -Lanny

  2. I like this buy a lot. In fact, it is my April stock purchase 🙂 Seeing KMB yield over 4% is a trigger for me. There are so many solid companies out there beaten down and giving us much better yields not seen in a long, long time, especially for the consumer staples. Long KMB!

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