Last Update 3/10/25
Kimberly-Clark Corporation (NYSE: KMB) is one of those companies that most people interact with daily, often without even realizing it. Whether it’s Kleenex tissues, Huggies diapers, or Scott toilet paper, Kimberly-Clark products are a staple in households worldwide. The company operates in the consumer staples sector, meaning it sells products that people continue to buy regardless of economic conditions.
That steady demand has made KMB a go-to stock for dividend investors looking for reliable income. While it may not be the most exciting company on the market, its long history of paying and increasing dividends keeps it on many income-focused investors’ radars. At a current share price of around $147, KMB offers a respectable dividend yield and a solid track record of rewarding shareholders.
Now, let’s take a closer look at its dividend metrics and whether it’s a good fit for those looking for steady income.
Key Dividend Metrics
📌 Dividend Yield: 3.42%
💰 Annual Dividend Per Share: $5.04
🔄 5-Year Average Dividend Yield: 3.43%
📈 Dividend Growth Streak: 52 Years
💼 Payout Ratio: 64.64%
📅 Next Dividend Payment: April 2, 2025
⚠️ Ex-Dividend Date: March 7, 2025
Dividend Overview
Kimberly-Clark is part of an elite group of companies known as Dividend Kings, meaning it has increased its dividend every year for over 50 years. This kind of consistency is rare and speaks to the company’s ability to generate steady cash flow through different market conditions.
Right now, the stock’s dividend yield is sitting at 3.42%, which is close to its five-year average. That means it’s offering about the same level of income as it has historically, which is a good sign for investors looking for stability.
One thing to watch is the payout ratio, which is currently at 64.64%. That means the company is paying out about two-thirds of its earnings as dividends. While that’s not alarmingly high, it does suggest that future dividend growth might be more moderate unless earnings grow at a faster pace.
Dividend Growth and Safety
One of the key reasons investors are drawn to Kimberly-Clark is its long track record of dividend growth. The company has been steadily increasing its payout for over five decades, a feat that very few companies can match.
However, the growth rate has slowed. Over the past five years, dividend increases have averaged around 4% per year. That’s still better than inflation in some years, but it’s not as aggressive as some other Dividend Aristocrats. Investors should keep in mind that while the dividend is secure, the days of rapid increases may be behind it.
From a safety standpoint, Kimberly-Clark generates plenty of cash to support its dividend payments. It pulled in $3.23 billion in operating cash flow over the past year and had $2.2 billion in free cash flow after accounting for expenses. That’s more than enough to cover dividends.
One area of concern is the company’s debt load. Kimberly-Clark has $7.92 billion in total debt, with a debt-to-equity ratio above 800%. That’s high compared to many of its peers and means the company relies more on borrowing than equity to fund its operations. While its strong cash flow makes it manageable, rising interest rates could make debt servicing more expensive over time.
Chart Analysis
Price Trend and Moving Averages
Kimberly-Clark (KMB) has been on a strong upward trajectory recently, rebounding sharply from the lows seen earlier in the chart. The price is now trading well above both the 50-day moving average (SMA) and the 200-day moving average (SMA), a bullish sign indicating that momentum is in the stock’s favor.
Earlier in the year, KMB was struggling below its 50-day moving average, with the stock unable to sustain upward momentum. That changed dramatically as buyers stepped in, pushing the price higher and allowing the 50-day moving average to turn upward. Now, the 50-day SMA has crossed back above the 200-day SMA, forming what’s known as a golden cross—typically a strong bullish signal.
Volume and Buying Interest
Trading volume tells an interesting story here. The recent push higher has been accompanied by a noticeable increase in volume, suggesting that institutional or large-scale buyers have been stepping in. This kind of volume expansion alongside price appreciation is a healthy sign of a sustained uptrend rather than a short-term bounce.
At the same time, volume spikes on previous downturns indicate some panic selling, which contributed to the stock’s earlier struggles. However, the fact that recent volume has been more heavily weighted on up days suggests that buyers now have control.
Relative Strength Index (RSI) and Overbought Conditions
The Relative Strength Index (RSI) at the bottom of the chart is hovering near the upper boundary, indicating that KMB is approaching overbought conditions. Typically, an RSI above 70 suggests that a stock may be due for a short-term pullback or consolidation before continuing its trend.
Over the past year, the RSI has cycled between overbought and oversold levels, closely tracking price action. The most recent oversold reading occurred around the time KMB bottomed out, and now, as it rallies, the RSI is nearing overbought territory again. While this isn’t necessarily a sell signal, it does indicate that the stock may need to cool off slightly before making another move higher.
Recent Candlestick Action
Looking at the last few trading sessions, the candlesticks show strong bullish momentum, with KMB closing near its highs for multiple days in a row. There haven’t been any significant upper wicks, which suggests that sellers haven’t been able to push the price back down after intraday rallies. This indicates strong buying pressure and a willingness among investors to hold onto shares rather than take quick profits.
One thing to watch for in the coming days is whether any reversal candles—such as doji or bearish engulfing patterns—start appearing. These would suggest that the stock is losing momentum and might be due for a short-term pullback.
Key Support and Resistance Levels
With KMB trading near recent highs, resistance sits just above the current price level, around the previous peak from earlier in the chart. If the stock can break through this level on strong volume, it could indicate the start of another leg higher.
On the downside, support appears around the 50-day moving average, which is currently rising. If KMB does experience a pullback, this could be a key level to watch for potential buyers stepping in. The 200-day moving average, sitting much lower, serves as a more significant long-term support level.
Analyst Ratings
📈 Upgrades
📊 Piper Sandler – On January 29, 2025, Piper Sandler reiterated an overweight rating for KMB but slightly lowered the price target from $161 to $158. While the minor target reduction reflects near-term caution, the firm remains confident in the company’s long-term stability and market positioning.
📊 Evercore ISI – On January 17, 2025, Evercore ISI raised its price target for Kimberly-Clark from $160 to $168, signaling optimism about the company’s ability to sustain profitability and navigate current market challenges effectively. Analysts cited improved operational efficiencies and a resilient consumer demand backdrop as reasons for the upgrade.
📉 Downgrades
⚠️ TD Cowen – On January 8, 2025, TD Cowen downgraded KMB from a buy to a hold, adjusting the price target from $159 to $145. The downgrade was driven by concerns over slower organic growth and waning benefits from previous cost reductions in commodities like pulp and paper. The firm sees headwinds that could limit upside potential in the near term.
⚠️ JPMorgan Chase & Co. – On January 16, 2025, JPMorgan lowered its price target from $140 to $124, assigning an underweight rating. Analysts pointed to ongoing pressures in the competitive landscape and potential margin compression as key reasons for the more cautious stance.
🎯 Consensus Price Target
📌 The latest 12-month consensus price target for Kimberly-Clark sits at $143.84, based on projections from multiple analysts.
📌 Price target estimates range from a low of $118 to a high of $168, reflecting differing opinions on how the company will perform in the current market environment.
📌 While some analysts remain confident in the company’s stability and dividend appeal, others are more cautious, highlighting growth challenges and cost pressures as potential risks.
These mixed ratings suggest that while Kimberly-Clark remains a solid defensive play, its near-term upside may depend on how well it navigates evolving market conditions.
Earnings Report Summary
Kimberly-Clark wrapped up the fourth quarter of 2024 with mixed results, showing both resilience and some ongoing challenges. Net sales came in at $4.93 billion, dipping slightly by 0.8% compared to the previous year. The decline was largely due to unfavorable currency exchange rates and the sale of its Personal Protective Equipment (PPE) business. However, when stripping out those factors, organic sales actually grew by 2.3%, with a nice boost from higher volumes and a slight price increase.
Profitability remained solid, with the company reporting a gross margin of 34.0%. After adjusting for certain restructuring costs, the adjusted gross margin stood at 35.4%, a modest improvement from the prior year. This was largely driven by productivity gains, although rising manufacturing costs and supply chain investments put some pressure on margins.
Operating profit for the quarter reached $548 million, but after factoring out one-time charges, the adjusted operating profit landed at $684 million—a small but positive increase compared to last year. That’s despite some headwinds from currency fluctuations and the divestiture of certain business segments.
On the earnings front, diluted earnings per share (EPS) came in at $1.34 for the quarter. On an adjusted basis, EPS was $1.50, which was just a slight dip of 0.7% from the previous year. The small decline was attributed to lower equity income, though that was mostly balanced out by higher operating profits.
Looking at the full-year numbers, total sales for 2024 reached $20.1 billion, down 1.8% year-over-year. The primary culprits were currency headwinds and business exits, but organic sales growth of 3.2% helped offset some of the weakness. Price increases, particularly in high-inflation regions, combined with stronger sales volumes, helped keep revenues relatively stable.
Margins also improved over the year, with an adjusted gross margin of 36.5%, up 200 basis points from the previous year. That improvement came from cost savings and price increases, though higher manufacturing costs remained a challenge. Adjusted operating profit for the full year climbed 9.4%, despite currency headwinds.
EPS for 2024 came in at $7.55, a solid jump from $5.21 in the prior year. Adjusted EPS was $7.30, reflecting an 11.1% increase, largely due to stronger operating profits.
Regionally, North American sales were relatively steady, with fourth-quarter revenue at $2.7 billion and organic sales inching up by 1.1%, thanks to higher volumes. International markets were more volatile, with some segments seeing sales declines due to pricing pressures and divestitures, though overall organic sales were still positive.
Kimberly-Clark’s results for the year showed steady performance despite economic challenges. The company managed to navigate cost pressures well, leveraging operational efficiencies and pricing strategies to maintain profitability. While revenue growth remains a bit sluggish, the company’s focus on improving margins and maintaining financial discipline kept its bottom line moving in the right direction.
Financial Health and Stability
Kimberly-Clark is a stable company, but its financials show a mix of strengths and weaknesses.
On the positive side, its profitability remains solid, with a 12.69% profit margin and a return on assets of 11.75%. These numbers suggest that the company is still efficient at generating earnings from its operations.
However, revenue growth has been sluggish. In the most recent quarter, sales were down 0.80% year-over-year, and earnings dropped by 12.20%. That’s not what you want to see in a company that relies on steady, predictable income streams. If this trend continues, it could put pressure on future dividend growth.
Debt is another potential issue. The company’s current ratio is 0.80, meaning it has fewer liquid assets than short-term liabilities. While Kimberly-Clark’s consistent cash flow helps mitigate this risk, it’s something investors should keep in mind when evaluating the stock’s long-term stability.
Valuation and Stock Performance
Kimberly-Clark isn’t a cheap stock, but it’s also not outrageously priced. The stock is trading at about 19.52 times its trailing earnings, which is roughly in line with its historical valuation. Looking ahead, analysts project a forward price-to-earnings ratio of 19.46, suggesting that earnings are expected to remain stable.
The stock has performed decently over the past year, with a 52-week range between $123.02 and $150.45. At its current price, it’s trading closer to the high end of that range, meaning it has already seen a decent run-up in value.
From a technical perspective, KMB is sitting above both its 50-day moving average of $132.90 and its 200-day moving average of $137.30. That suggests some recent momentum, though it may also mean the stock is slightly overbought in the short term.
Risks and Considerations
While Kimberly-Clark is a reliable dividend stock, there are some risks to consider before investing.
📉 Slowing Revenue Growth – The company’s sales have been stagnating, which could limit future dividend increases. If revenue continues to decline, the company may have to rely more on cost-cutting or debt to maintain payouts.
⚠️ High Debt Levels – Kimberly-Clark’s debt-to-equity ratio is quite high, which means it has less financial flexibility than some of its competitors. Rising interest rates could make this debt more expensive to manage.
💲 Rising Costs – The price of raw materials like pulp and transportation costs can impact Kimberly-Clark’s profit margins. If costs rise faster than the company can pass them on to consumers, profitability could take a hit.
🌍 Consumer Preferences and Competition – While Kimberly-Clark’s brands are well-established, private-label competition is increasing. If consumers shift toward cheaper alternatives, the company may have to adjust its pricing strategy, which could impact margins.
Final Thoughts
Kimberly-Clark is the kind of stock that dividend investors tend to appreciate—steady, predictable, and reliable. It may not deliver explosive growth, but it has a long history of rewarding shareholders with consistent dividend payments.
The company’s 3.42% yield is attractive, especially in an uncertain market environment. Its strong cash flow supports continued payouts, and its status as a Dividend King reinforces its commitment to returning value to investors.
That said, growth is slowing, and debt levels remain high. Investors who prioritize income over capital appreciation will likely find Kimberly-Clark appealing, but those looking for stronger long-term growth may want to consider alternatives.
For income-focused investors, KMB remains a solid choice, but keeping an eye on revenue trends and debt management will be key in the coming years.
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