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Up to date on January twenty seventh, 2024
Buyers in search of high-quality dividend progress shares ought to take a more in-depth have a look at the Dividend Aristocrats, a gaggle of 68 firms within the S&P 500 Index with 25+ consecutive years of dividend will increase.
With this in thoughts, we created a listing of all of the Dividend Aristocrats.
You may obtain the total spreadsheet of all 68 Dividend Aristocrats, together with a number of vital monetary metrics equivalent to dividend yields and price-to-earnings ratios, by clicking on the hyperlink under:
Disclaimer: Positive Dividend just isn’t affiliated with S&P International in any means. S&P International owns and maintains The Dividend Aristocrats Index. The data on this article and downloadable spreadsheet is predicated on Positive Dividend’s personal evaluate, abstract, and evaluation of the S&P 500 Dividend Aristocrats ETF (NOBL) and different sources, and is supposed to assist particular person traders higher perceive this ETF and the index upon which it’s primarily based. Not one of the data on this article or spreadsheet is official knowledge from S&P International. Seek the advice of S&P International for official data.
We evaluate every of the Dividend Aristocrats yearly, and the subsequent inventory on this 12 months’s version is shopper merchandise large Kimberly-Clark (KMB).
Kimberly-Clark has raised its dividend for 52 consecutive years. It is usually a member of the much more unique Dividend Kings checklist.
The inventory additionally presently has a 4% dividend yield, which is greater than double the ~1.6% common dividend yield of the S&P 500 Index.
This text will focus on Kimberly-Clark’s enterprise mannequin, progress potential, and whether or not the inventory is presently buying and selling at a sexy valuation.
Enterprise Overview
Kimberly-Clark traces its beginnings again to 1872. 4 younger businessmen, John A. Kimberly, Havilah Babcock, Charles B. Clark, and Frank C. Shattuck, got here up with $30,000 of start-up capital to kind Kimberly, Clark and Co.
Immediately, Kimberly-Clark is a world shopper merchandise firm that operates in 175 nations and sells disposable shopper items, together with paper towels, diapers, and tissues.
It operates by means of two segments that every home many fashionable manufacturers: Private Care Section (Huggies, Pull-Ups, Kotex, Rely, Poise) and the Client Tissue phase (Kleenex, Scott, Cottonelle, and Viva), producing over $20 billion in annual income.
Supply: Investor Presentation
Kimberly-Clark posted fourth quarter and full-year earnings on January twenty fourth, 2024. Adjusted earnings-per-share got here to $1.51, which was three cents mild of estimates. Income was flat year-over-year at $4.97 billion. Natural gross sales have been up 3% in the course of the quarter, attributable to a 2% achieve in pricing and a 1% tailwind from favorable product combine.
Progress Prospects
Kimberly-Clark has dedicated to elevating its core manufacturers as one of many three pillars of progress within the coming years. It is going to do that by launching completely different product improvements by way of extensions of present strains and fully new merchandise. The corporate will even proceed to handle its income by way of pricing and blend in addition to promotional methods.
The second progress pillar is accelerating progress in its creating and rising (D&E) markets, which comprise a good portion of the corporate’s gross sales.
KMB will deal with its private care {and professional} segments particularly, with its most vital alternatives coming from locations the place it has low class penetration and frequency of utilization.
Kimberly-Clark additionally continues to pursue value financial savings. Kimberly-Clark’s administration staff has repeatedly prolonged this initiative, aiming for one more $1.5 billion of cumulative financial savings over a three-year interval.
We count on 5% annual earnings progress within the years to return, as we count on volumes to stay largely regular.
Aggressive Benefits & Recession Efficiency
Kimberly-Clark’s most vital aggressive benefits are its manufacturers and world scale. The corporate enjoys a management place throughout its model portfolio and, certainly, the world over.
It retains its aggressive benefits by means of advertising and marketing and innovation. This enables the corporate to remain forward of the competitors. Given its dedication to its progress pillars, we count on this can solely enhance over time.
As well as, Kimberly-Clark’s world attain supplies the corporate with the effectivity to maintain prices low. The continued value discount program is an instance of its skill to successfully handle prices, whilst income grows.
Kimberly-Clark stays extremely worthwhile, even throughout recessions. For instance, it carried out effectively by means of the Nice Recession of 2007-2009. Its earnings-per-share by means of the Nice Recession are proven under:
- 2007 earnings-per-share of $4.25
- 2008 earnings-per-share of $4.06 (4.5% decline)
- 2009 earnings-per-share of $4.52 (11% enhance)
- 2010 earnings-per-share of $4.45 (1.5% decline)
As you’ll be able to see, whereas Kimberly-Clark did see earnings decline in 2008 and 2010, it additionally registered a double-digit progress fee in 2009. The rationale for its robust efficiency over the course of the recession is that the corporate sells merchandise that buyers want no matter financial situations.
Shoppers will at all times want private care merchandise, whatever the situation of the economic system. This provides Kimberly-Clark a sure degree of product demand annually, even throughout recessions.
Valuation & Anticipated Returns
Primarily based on adjusted earnings-per-share of $6.85 for 2024, Kimberly-Clark trades for a price-to-earnings ratio of 17.7.
Excluding outlier years, Kimberly-Clark has traded at a mean price-to-earnings ratio of ~18 during the last decade. That is additionally our estimate of honest worth for the inventory. Due to this fact, shares seem like barely undervalued proper now.
If the inventory valuation expands from 17.7 to 18 over the subsequent 5 years, it should increase annual returns by 0.3% per 12 months.
As well as, future returns might be generated from earnings progress and dividends. Given the corporate’s robust manufacturers and progress catalysts, common annual earnings progress of 5% is an affordable expectation. The inventory additionally has a 4.0% dividend yield.
In whole, we see annual returns of 9.3% over the subsequent 5 years. This can be a strong anticipated fee of return, however is just under our purchase threshold of 10%.
Closing Ideas
Kimberly-Clark is a high-quality firm with a various portfolio of robust manufacturers. It has constructive progress prospects shifting ahead, and it’s an especially dependable dividend inventory. Rising markets, value reductions, and share repurchases will spotlight future earnings progress.
Kimberly-Clark has elevated its dividend for over 50 years in a row and presently has a dividend yield of 4%. It, due to this fact, meets our definition of a blue-chip inventory, and it ought to proceed to ship regular dividend will increase annually.
If you’re fascinated with discovering extra high-quality dividend progress shares appropriate for long-term funding, the next Positive Dividend databases might be helpful:
The main home inventory market indices are one other strong useful resource for locating funding concepts. Positive Dividend compiles the next inventory market databases and updates them month-to-month:
Thanks for studying this text. Please ship any suggestions, corrections, or inquiries to [email protected].
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