Kimberly Clark (KMB) 2013 Review

Kimberly Clark develops, manufactures and markets personal care products (Huggies, Pull Ups, Little Swimmers, Goodnights, Kotex, Depends, Kleenex, Scott, Cottonelle tissue, Viva paper towels, workplace health products [soaps, sanitizers, etc] and healthcare products). KMB has grown its profits and dividends at a 3-10% annual rate over the past 10 years earning an amazing 30%+ rate of return on equity.  As with many of our companies, Kimberly has had a rough go of it in the last five years as customers ‘traded down’ to generic brands.  However, the company is seeing improvement in its bottom line which should continue as a result of:

(1) significant cost cutting as well as better supply chain management,

(2) expansion into emerging markets,

(3) new product innovation,

(4) a significant stock buy back program.

Negatives:

(1) volatile commodity prices,

(2) macro-economic uncertainty.

KMB is rated A++ by Value Line, carries a 50% debt to equity ratio and its stock yields 3.3%

  Statistical Summary

                 Stock      Dividend         Payout      # Increases  

                 Yield      Growth Rate     Ratio       Since 2003

KMB          3.3%          5%                61%             10

Ind Ave       2.3            10                 40                NA 

                Debt/                        EPS Down       Net        Value Line

                Equity         ROE      Since 2003      Margin       Rating

KMB         50%           40%            3                  9             A++

Ind Ave     41               17             NA                9            NA

     Chart

            Note: KMB stock made great progress off its March 2009 low, quickly surpassing the downtrend off its June 2007 high (red line) and the November 2008 trading high (green line).  Long term, KMB is in an uptrend (straight blue lines).  Intermediate term, it is an uptrend (purple lines).  The wiggly blue line is on balance volume.  The High Yield Portfolio owns a 50% position in KMB as a result of the stock having traded into its Sell Half Range and the Portfolio acting accordingly.  The upper boundary of its Buy Value Range in $54; the lower boundary of its Sell Half Range is $90.

http://finance.yahoo.com/q?s=KMB

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