Thursday, March 8, 2018

Recent Buy - Kimberly-Clark Corp (KMB)

Today I initiated a new position in Kimberly-Clark Corp (KMB).  I have been watching this stock in recent months and have had a specific price in mind and it has been hovering dang close so I decided not to quibble over the few extra cents and decided to raise my limit order to $111.50, which was executed this afternoon.  Below are the details of the purchase.


Purchased: 25 shares x $111.50 = $2,787.50 (+$0 commission)

Dividend Income: $100.00 ($4.00/sh annually; paid quarterly in Jan, Apr, Jul, and Oct)

P/E ratio: 17.6 (vs. S&P @ 25.23)

Debt to capital < 50%: No, 87.3%

Interest coverage ratio of at least 3:1: Yes, 10.4x

S&P and/or Moody's credit rating of BBB+/Baa1 or better: Yes, A

Current dividend yield > 1.5x S&P yield: Yes, 3.59% vs. S&P @ 1.9%

Payout ratio < 60% (or <85% for utilities):  No, 62.5%

Dividend King or CCC classification: Champion (45+ years of dividend increases)

Comments: According to Reuters, the 5 year dividend growth rate is 11.52% and as noted above KMB has consistently raised dividends for 45+ years.  At current valuation, KMB will remain on my radar to additional contributions of capital. The company profile I've provided below lists all the major products the company manufactures and markets.  It doesn't matter if the economy is expanding or contracting, babies will continue to mess their diapers, women will still need their feminine products, and folks will still need Kleenex to blow their nose throughout the year.  Who wouldn't want to be the owner of a business where there was such a consistent demand/need for its products?



Company Profile
Kimberly-Clark Corporation, together with its subsidiaries, manufactures and markets personal care, consumer tissue, and professional products worldwide. It operates through three segments: Personal Care, Consumer Tissue, and K-C Professional. The Personal Care segment offers disposable diapers, training and youth pants, swimpants, baby wipes, feminine and incontinence care products, and other related products under the Huggies, Pull-Ups, Little Swimmers, GoodNites, DryNites, Kotex, U by Kotex, Intimus, Depend, Plenitud, Poise, and other brand names. The Consumer Tissue segment provides facial and bathroom tissues, paper towels, napkins, and related products under the Kleenex, Scott, Cottonelle, Viva, Andrex, Scottex, Neve, and other brand names. The K-C Professional segment offers wipers, tissues, towels, apparel, soaps, and sanitizers under the Kleenex, Scott, WypAll, Kimtech, and Jackson Safety brands. The company sells household use products directly to supermarkets, mass merchandisers, drugstores, warehouse clubs, variety and department stores, and other retail outlets, as well as through other distributors and e-commerce; and away-from-home use products directly to manufacturing, lodging, office building, food service, and public facilities, as well as through distributors. Kimberly-Clark Corporation was founded in 1872 and is headquartered in Dallas, Texas.

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