Kimberly-Clark Continues Increasing Dividends, Looking for Falling Share Price Trend Reversal (KMB)
By: Ned Piplovic,
Featured Image Source: 2018 Fact Sheet at http://www.kimberly-clark.com/home/news/press-kit#mediacontacts
The Kimberly-Clark Corporation (NYSE:KMB) has been a stellar source of increasing dividends for more than four decades and continued that record with last period’s 46th consecutive dividend boost to its annual dividend payout.
The current 3.8% dividend yield is higher than the company’s own five-year average yield and outperforms all but a couple of Kimberly-Clark’s industry peers. While the company has been increasing dividends year-after-year, most of that yield increase resulted from its share-price decline of more than 18% over the past year.
Kimberly-Clark’s streak of more than four decades of consecutive annual hikes puts the company in the exclusive group of just 51 companies designated as Dividend Aristocrats. Dividend Aristocrats are S&P 500 companies with a minimum market capitalization of $3 billion and at least 25 consecutive years of increasing dividends.
Except for a small recovery in November 2017, the company’s share price has been on a declining trend for more than a year and its share price has been trading below the 50-day moving average (MA) since the end of January 2018. However, the share price has shown some positive signs since hitting its current low for the year in late April and increased to the 50-day MA level.
Some interested investors might wait until the share price crosses above the 200-day MA as a technical indicator to take a long position in the KMB stock. However, the company reported mostly positive results for the first quarter of 2018. If the share price uptrend continues, waiting for the share to price to cross above the 200-day MA level of approximately $114 could eliminate almost 10% of potential asset appreciation.
Therefore, investors looking for an equity with a steadily increasing dividend income and long-term asset appreciation potential should do their own research to weigh the additional risk against the possible payout if the share price extends its growth of the past 30 days into a long-term trend.
The company’s next ex-dividend date is set for June 7, 2018, and the pay date for the next round of dividend distribution is set for July 3, 2018.
Kimberly-Clark Corporation (NYSE:KMB)
Founded in 1872 and headquartered in Dallas, Texas, the Kimberly-Clark Corporation manufactures and markets personal care, consumer tissue and professional products. The company has manufacturing operations in 35 countries and sells its products in almost 180 countries. The Personal Care segment offers disposable diapers and baby wipes, as well as feminine and incontinence care products. Kimberly-Clark distributes these products under multiple brand names, including Huggies, Pull-Ups, Little Swimmers, GoodNites, DryNites, Kotex, Depend and Poise. Under the Consumer Tissue segment, the company provides facial and bathroom tissues, paper towels, napkins and related products under the Kleenex, Scott, Cottonelle, Viva and other brand names. The K-C Professional segment offers wipes, tissues, towels, apparel, soaps and sanitizers under the Kleenex, Scott, WypAll, Kimtech and Jackson Safety brands.
The share price reached its 52-week high of $133.52 on June 26, 2017. Aside from a brief rise of nearly 12% during November 2017, the share price declined steadily until it reached its 52-week low of $98.52 on April 23, 2018, for a total loss of more than 26% from the June 2017 peak price. Since bottoming out at the end of April 2018, the share price gained 7% and closed on May 29, 2018, at $105.38, which is still 21% below the June peak and more than 18% behind its share price level of approximately $129 from one year earlier. However, the current share price is still just slightly below the company’s long-term trendline.
The company’s current $1.00 dividend is 3.1% higher than the $0.97 dividend distribution from the same period last year. This new dividend amount is equivalent to a $4.00 annual payout and currently yields 3.8%, which is 22.4% above KMB’s 3.1% average yield over the past five years.
Since beginning its current streak of increasing dividends every year since 1972, Kimberly-Clark has enhanced its total annual payout more than 58-fold, which corresponds to an average dividend growth rate of 9.2% per year. The company’s average annual dividend growth rate slowed to 7.2% over the past two decades, which is equivalent to a four-fold increase since 1998.
In addition to outperforming its own yield average, Kimberly-Clark’s current 3.8% dividend yield is double the 1.90% average yield of all the companies in the Personal Products segment and 95% higher than the 1.95% average yield of the entire Consumer Products sector. Additionally, the company currently has the third-highest yield among its peers in the Personal Products industry segment and is 33% higher than the 2.85% average yield of all dividend-paying companies in the segment.
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Ned Piplovic is the assistant editor of website content at Eagle Financial Publications. He graduated from Columbia University with a Bachelor’s degree in Economics and Philosophy. Prior to joining Eagle, Ned spent 15 years in corporate operations and financial management. Ned writes for www.DividendInvestor.com and www.StockInvestor.com.