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Kimberly-Clark (KMB), a leading consumer products company, posted solid results in fiscal 2022 and is committed to returning value to shareholders through consistent dividend payments. KMB’s strong fundamentals make it an ideal buy. keep reading.
Kimberly-Clark’s (KMB) sells necessities such as sanitary products, diapers, paper towels, and toilet paper that are often purchased regardless of irregular periods, making it a defensive brand. This article delves further into what makes KMB a reliable and safe investment option for investors.
KMB recently increased its dividend by 1.7% from the previous quarter to $1.18. The company’s history of 50 consecutive years of dividend increases demonstrates its commitment to returning value to shareholders.
The annual dividend of $4.72 per share translates to a 3.48% yield at current market prices, which is higher than the 3.25% four-year dividend yield. The company’s dividend payout has grown at a CAGR of 3.9% over the past three years.
Recently, Ethisphere, a global leader in defining and promoting standards of ethical business practices, announced that KMB 2023 World’s Most Ethical CompaniesThis recognition has been received for the fifth consecutive year and honors the company’s commitment to business integrity through best-in-class ethics, compliance and governance practices.
Additionally, the magazine was ranked 3rd in the 2023 KMB ranking. 100 Most Sustainable Companiesrecognizes superior Environmental, Social and Governance (ESG) ratings among the 1,000 largest publicly traded companies in the United States. This is the fourth year in a row that the company has been on the list.
In addition, KMB expects strong results in the fourth quarter and fiscal 2022, and EPS growth of 2% to 6% year-over-year in fiscal 2023. The company also anticipates capital spending of $800 million to $900 million. share buyback $100 million to $150 million this year.
Additionally, KMB’s revenue increased at a CAGR of 3% and leveraged free cash flow increased at a CAGR of 9.9% over the past three years.
Additionally, the stock has gained 18.4% over the past six months, closing its last trading session at $135.66. It rose 7.3% last month.
Here are some things that could impact KMB performance in the coming months:
solid finances
KMB’s fiscal 2022 net sales increased 3.8% year-over-year to $20.18 billion. The company’s gross profit increased 3.9% year-on-year to $6.22 billion. Operating profit increased by 4.7% year-on-year to $2.68 billion.
The company’s net income attributable to KMB was $1.93 billion, up 6.6% year-over-year, and EPS was $5.72, up 6.9% year-over-year.
Additionally, KMB’s gross profit increased 13.3% year-over-year to $1.63 billion during the fourth quarter of the fiscal year ended December 2022. The company’s operating profit was $712 million, up 36.7% year-on-year. Additionally, KMB’s adjusted EPS increased 18% year over year to $1.54.
Favorable Analyst Quote
Analysts expect KMB’s revenue to grow 1.8% year-over-year to $20.53 billion in 2023. The company’s EPS is expected to be $5.92 this year, up 5.2% year over year. Additionally, he outperformed consensus estimates for his EPS and earnings in three of the four quarters since. This is impressive.
Additionally, the company’s revenue and EPS for the second quarter of the fiscal year ending June 2023 are expected to increase slightly by 3.3% year-over-year to $24.44 billion and $1.38, respectively.
discount rating
In terms of future EV/sales, the KMB multiple of 2.64 is 3.3% lower than the five-year average of 2.73.
The stock’s forward P/S multiple of 2.21 is 4.4% lower than the five-year average of 2.31. The price per bottle was 82.95x over the last 12 months, 18% lower than the five-year average of 101.19x.
high profitability
KMB’s 12-month net profit margin was 9.59%, 135.2% higher than the industry average of 4.08%. Twelve-month EBIT and EBITDA margins of 13.01% and 16.74%, 62.8% and 52.5% above industry averages of 7.99% and 10.98%.
In addition, the stock’s 12-month ROCE, ROTC, and ROTA of 364.56%, 16.61%, and 10.76% are higher than the industry average of 10.59%, 6.32%, and 4.17%, respectively. Its trailing 12-month leveraged FCF margin of 8.24% is 210.3% higher than the industry average of 2.65%.
POWR Rating Shows Promise
KMB’s overall rating is B. POWR rating system. The POWR Rating is calculated taking into account 118 different factors, each weighted to an optimal degree.
Our proprietary rating system also evaluates each stock based on eight different categories. KMB has a B-grade stability and a 60-month beta of 0.41.
In sync with the discounted rating, there is a B grade of value.
KMB ranks 17th out of 54 shares. consumer goods industry.
click here Access KMB growth, momentum, sentiment, and quality ratings.
Conclusion
The stock is trading above the 50-day and 200-day moving averages of $128.22 and $129.20, indicating an upward trend.
In addition, the company enjoys strong cash flow, allowing it to pay dividends for 50 consecutive years.
Given the company’s strong financial position, impressive growth potential, high profitability, and undervalued valuation, investing in this trustworthy consumer stock could be a wise decision.
how Kimberly-Clark Corporation (KMB) Do you stack up against your peers?
KMB has an overall POWR rating of B, equivalent to a purchase rating. Check out our other A (Strong Buy) rated stocks in the consumer goods industry: Ennis, Inc. (EBFs) and Yue Yuen Industrial (Holdings) Limited (Yui)
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KMB shares were unchanged in pre-market trading on Thursday. Year-to-date, the KMB is up his 0.90%, while the benchmark S&P 500 index is up his 6.99% over the same period.
About the author: Kritika Sarmah
Her interest in high-risk instruments and passion for writing led Kritika to become an analyst and financial journalist. She has a Bachelor of Commerce degree and currently she is working on the CFA program. With her groundbreaking approach, she aims to help investors identify untapped investment opportunities.
post Play safe with this trustworthy inventory first appeared StockNews.com