This is an analysis completed by The Dividend Guy. It is not to be used as investment advice or a recommendation to buy, hold, or sell any stocks discussed. Please ensure you complete your own analysis.
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When you need to blow your nose, what do you ask for? Most people ask for a Kleenex and Kleenex is a brand owned by the Kimberly-Clark Corporation. What we really asking for a tissue, however Kleenex has done such a good job of associating tissues with the Kleenex brand it is something we all recognize and associate with. Kimberly-Clark is also a strong dividend stock, with at least 25 years of dividend increases. Obviously that is something that I and other dividend investors are very interested in. I had a look at the stock, and here is what I found.
The Company: Kimberly-Clark Corp (KMB-N)
Kimberly-Clark Corporation is one of the leading consumer products companies. Its global tissue, personal care and health care brands include Huggies, Pull-Ups, Kotex, Depend, Kleenex, Scott, Kimberly-Clark, Safeskin, Tecnol, Kimwipes and Wypall. Other brands well known outside the U.S. include Andrex, Scottex, Page, Popee and Kimbies. Kimberly-Clark also is a major producer of premium business, correspondence and technical papers.
| Yes | |
| Yes |
THE FUNDAMENTALS
Revenue
Click to EnlargeRevenue Scoring
| Criteria | Scoring |
| Consistenly Up with No Down Years | 1.0 |
| Up Trend with Less Than 2 Down Years | 0.5 |
| Choppy with Greater Than 2 Down Years | 0.0 |
| My Revenue Score | 0.5 out of 1.0 |
Earnings Per Share
Click to EnlargeEarnings Per Share Scoring
| Criteria | Scoring |
| Consistenly Up with No Down Years | 1.0 |
| Up Trend with Less Than 2 Down Years | 0.5 |
| Choppy with Greater Than 2 Down Years | 0.0 |
| My EPS Score | 0.5 out of 1.0 |
TOTAL FUNDAMENTALS SCORE: 1.0 out of 2.0
THE RATIOS
Return on Equity
Click to EnlargeReturn on Equity Scoring
| Criteria | Scoring |
| Above 15% for Last 5 Years | 1.0 |
| At Least One Year Below 15% in Last 5 Years | 0.0 |
| My ROE Score | 1.0 out of 1.0 |
Other Ratios
| Ratio | Criteria | Value | Score (Pass=1 / Fail = 0) |
| Debt to Equity | Less Than 0.50 | 1.03 | 0.0 |
| Payout Ratio | Less Than 60% | 51% | 1.0 |
| Credit Rating | BBB+ | A+ | 1.0 |
| Total Ratio Score | 2.0 out of 3.0 |
TOTAL RATIOS SCORE: 3.0 out of 4.0
DIVIDEND DATA
Annual Dividends
Click to EnlargeDividend Scoring
| Criteria | Scoring |
| 25+ Years of Dividend Growth | 1.0 |
| 10+ Years of Dividend Growth | 1.0 |
| Less Than 10 Years of Dividend Growth | 0.0 |
| My Dividend Growth Score | 2.0 out of 2.0 |
TOTAL DIVIDEND GROWTH SCORE: 2.0 out of 2.0
STOCK VALUATION
| Valuation Metric | Criteria | Value | Score (Pass=1 / Fail = 0) |
| Dividend Yield | Cur Yld Greater Than 10 Yr Avg Yld | 2.5% | 1.0 |
| Div Yld Compared to SPY Div Yld | Cur Yld Greater Than SPY Yld | 1.8% | 1.0 |
| P/E Ratio | Cur P/E Less Than 10 Yr Avg P/E | 17.3 | 1.0 |
| Relative P/E | Relative P/E Less Than 1.0 | 0.84 | 1.0 |
| Price to Sales | Less Than 1.5 | 1.43 | 1.0 |
| Total Ratio Valuation Score | 5.0 out of 5.0 |
Canadian Shareowner’s Association Stock Selection Guide Software Buy Price
| Buy Zone |
Maybe Zone |
Sell Zone |
Current Price | Rating | Scoring (Buy=1.0, Other=0.0) |
| 1.0 |
TOTAL STOCK VALUATION SCORE: 6.0 out of 6.0
SUMMARY
Points Earned:
12 out of 14 – half points are rounded down to be conservative
The stock is rated HIGH with 12 points earned through my analysis of the stock. The revenue and EPS trends are not totally positive, as there have been a couple of down years in the past. However, these down years are not too dramatic for that much concern. I am a little discouraged by the higher debt level the company has taken on. An investor will want to watch to ensure this metric trends downward in subsequent re-evaluations of the company. Overall, I am encouraged by the company and am going to add it to my watch list.
| Rating | Points Required |
| High | 11+ points |
| Medium | 8-10 points |
| Low | < 8 points |
Reminder: This is an analysis completed by The Dividend Guy. It is not to be used as investment advice or a recommendation to buy, hold, or sell any stocks discussed. Please ensure you complete your own analysis.
The Dividend Guy does not own shares in HSE
I love dividend stock Wednesdays. Keep up the good work DG!
Have you “tweaked” your point-tally system over time? Or have you basically used the same system from the start?
HI Cash Canuck – thanks for the comment.
YEs, I have tweaked it over time and am planning on doing so once again shortly. I think I need to separate the fundamentals and the valuation part out a bit more. I want to decide on the fundamentals of the company first, decide if I should even go forward with the stock, and then determine what price I would be comfortable buying it at!
TDG