Kimberly-Clark Rewards Shareholders with 3%-Plus Dividend Yield (KMB)
By: Ned Piplovic,
The Kimberly-Clark Corporation (NYSE:KMB) continues rewarding its shareholders with persistently rising dividend income and above-average dividend yield, as well as steady asset appreciation, which combined for a 28.85% total return during the past 12 months.
The company has been paying dividends since 1935. Furthermore, the current streak of consecutive annual dividend hikes stretches back 47 years. As a component of the S&P 500 index with a market capitalization in excess of $3 billion and such a long streak of annual dividend hikes, Kimberly-Clark is a member of a selected group of only 54 companies designated as Dividend Aristocrats. If Kimberly-Clark manages to prolong its streak of annual dividend hikes for just three more years, the company will join an even more exclusive group of just 16 other S&P 500 companies awarded the Dividend Kings label for hiking their annual dividends at least 50 consecutive years.
While Kimberly-Clark raised its payout at the beginning of 2019 again, the dividend yield has declined compared to last year because the share price has been rising faster than the dividend payout amount during the trailing 12-month period. However, despite being slightly suppressed by the rapidly increasing share price, Kimberly-Clark’s current dividend yield still outperforms industry averages.
Investors looking for opportunities to invest in equities with steadily increasing dividend income and long-term asset appreciation should conduct their own due diligence before considering taking a long position in the Kimberly-Clark Stock. The company will distribute its next round of dividend distributions on the July 2, 2019, pay date to all shareholders who claim stock ownership prior to the June 6, 2019, ex-dividend date.
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 company increased its quarterly dividend distribution 3% from $1.00 in the second quarter last year to the upcoming $1.03 quarterly distribution. This new dividend amount corresponds to a total annual dividend payout of $4.12 and a 3.15% forward dividend yield. While slightly lower than the dividend yield from 2018 because of the share price increase, the current 3.15% dividend yield is still slightly higher than the company’s own 3.1% average yield over the past five years.
In addition to outperforming its own yield average, Kimberly-Clark’s current dividend yield is 61% higher than the 1.95% average yield of the overall Consumer Products sector. The current dividend yield also outperformed the 1.99% simple average yield of all the companies in the Personal Products segment by 58%. Additionally, Kimberly-Clark currently has the fourth-highest yield among its peers in the Personal Products industry segment and is in line with the 3.18% average yield of the segment’s only dividend-paying companies.
The Kimberly-Clark Corporation has increased its total annual dividend 60-fold since the current streak of 47 consecutive dividend hikes began in 1973. Over this period, the company managed to achieve an average growth rate of 9.1%. The growth rate declined in the past two decades. However, the company still managed to enhance its total annual payout four-fold since 1999 for an average annual growth rate of 7.1%.
The share price declined more than 27% over a two-year period starting in April 2016. This share price drop limited the total return on shareholders investment to just 14% over the past three years. However, long-term shareholders and recent investors enjoyed significantly higher returns. The share price resurgence over the trailing 12-month period combined with rising dividend income to deliver a one-year total return of nearly 30%. Shareholders who invested prior to the 2016 share price pullback and held their position through the correction enjoyed a total return of nearly 43% over the past five years.
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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.