In IBD’s Dividend Leaders screen, dividend aristocrat Kimberly-Clark (KMB) is in focus as a stable stock with an impressive track record of dividend increases.
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Founded in 1874, Kimberly-Clark is a leading manufacturer of personal care paper products such as diapers, paper towels, tissues and wipes. Consumers can recognize the company through a plethora of everyday brands, some of which include Kleenex, Kotex, Scott and Huggies.
Over 50 Years of Dividend Increases
With over 50 years straight of dividend increases, Kimberly-Clark is a gold star among dividend payers. The stock currently yields 3.6% on an annualized basis, with its next quarterly dividend of $1.16 expected in mid-December.
Backing up the dividend is a stable company, which has products that are essential to a quarter of the world’s population every day. This has allowed Kimberly-Clark to increase dividends irrespective of macroeconomic conditions. The company is part of the S&P Dividend Aristocrats index.
Although the company is carrying sizable debt, it does have a strong investment grade rating of A from S&P Global.
While there is currently little risk to Kimberly-Clark’s dividend, investors expecting any growth might want to look elsewhere. Earnings per share have been stagnant for the past five years and are projected to continue as such into 2023. The company has recently seen margins squeezed by inflationary pressures and currency headwinds.
Margins Improve In Q3
On a positive note, CEO Mark Hsu reported progress in the third quarter restoring margins. With a dominant market share and essential consumer products, the company should have significant pricing power. With the U.S. Dollar index also dropping 6% over the past two weeks, currency headaches should also ease in the fourth quarter.
Nevertheless, with a limited growth picture and soaring interest rates, conservative investors may be swayed to fixed income. At a 4.6% yield, a one-year treasury is a strong alternative for income-seeking investors.
Shares of Kimberly-Clark are forming a double-bottom base with a 137.97 buy point. The stock climbed back above the 200-day moving average the past few days.
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Source: https://www.investors.com/research/the-income-investor/top-dividend-stocks-dividend-aristocrat-kimberly-clark-shapes-new-pattern/?src=A00220&yptr=yahoo