Kimberly-Clark Corp's Dividend Analysis
Assessing the Upcoming Dividend and Historical Performance
Kimberly-Clark Corp (NYSE:KMB) recently announced a dividend of $1.18 per share, payable on 2024-01-03, with the ex-dividend date set for 2023-12-07. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Kimberly-Clark Corps dividend performance and assess its sustainability.
What Does Kimberly-Clark Corp Do?
This Powerful Chart Made Peter Lynch 29% A Year For 13 Years
How to calculate the intrinsic value of a stock?
With more than half of sales from personal care and another third from tissue products, Kimberly-Clark sits as a leading manufacturer in the tissue and hygiene realm. Its brand mix includes Huggies, Pull-Ups, Kotex, Depend, Kleenex, and Cottonelle. The firm also operates K-C Professional, which partners with businesses to provide safety and sanitary products for the workplace. Kimberly-Clark generates just over of half its sales in North America and more than 10% in Europe, with the rest primarily concentrated in Asia and Latin America.
A Glimpse at Kimberly-Clark Corp's Dividend History
Kimberly-Clark Corp has maintained a consistent dividend payment record since 1973. Dividends are currently distributed on a quarterly basis.
Kimberly-Clark Corp has increased its dividend each year since 1973. The stock is thus listed as a dividend king, an honor that is given to companies that have increased their dividend each year for at least the past 50 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Kimberly-Clark Corp's Dividend Yield and Growth
As of today, Kimberly-Clark Corp currently has a 12-month trailing dividend yield of 3.87% and a 12-month forward dividend yield of 3.88%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Kimberly-Clark Corp's annual dividend growth rate was 4.00%. Extended to a five-year horizon, this rate decreased to 3.90% per year. And over the past decade, Kimberly-Clark Corp's annual dividends per share growth rate stands at 4.40%.
Based on Kimberly-Clark Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Kimberly-Clark Corp stock as of today is approximately 4.69%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-09-30, Kimberly-Clark Corp's dividend payout ratio is 0.90, which may suggest that the company's dividend may not be sustainable.
Kimberly-Clark Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Kimberly-Clark Corp's profitability 8 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Kimberly-Clark Corp's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Kimberly-Clark Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Kimberly-Clark Corp's revenue has increased by approximately 3.80% per year on average, a rate that underperforms than approximately 60.83% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Kimberly-Clark Corp's earnings increased by approximately -6.50% per year on average, a rate that underperforms than approximately 66.53% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -1.70%, which underperforms than approximately 66.77% of global competitors.
Next Steps
Considering Kimberly-Clark Corp's consistent dividend payments, its status as a dividend king, and its payout ratio, investors may find the stock to be an attractive option for steady income. However, the payout ratio suggests caution, as it may indicate limited room for dividend growth or sustainability. With a solid profitability rank but mixed growth metrics, the future outlook for Kimberly-Clark Corp's dividends appears nuanced. Investors should weigh these factors, alongside industry trends and the company's strategic initiatives, to make informed decisions about their investments in KMB.
GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
