Kimberly-Clark: A Defensive Pick Trading At Fair Value

dividend growth investing | stock analysis | minimum acceptable rate of return

Kimberly-Clark (KMB) has an incredible history of generating excellent returns for investors.  However, the last decade has been quite difficult for the company as revenues have stagnated along with margins compressing due to higher commodity costs.  That double whammy led to free cash flow declining ~2.5% per year.

We've preferred Huggies diapers to the alternatives and with one daughter getting out of diapers about a year ago and a 7-month old in tow, I wanted to take a look at this Dividend Aristocrat to see if it's time that I add it to my portfolio.

Dividend History

Dividends might be boring, but sometimes boring is good.  Dividend payments are a sign of a strong business that generates excess cash that management doesn't feel it needs to maintain or expand the business at acceptable returns.  As I build out my portfolio, I primarily focus on businesses with a history of paying and growing their dividend payments.

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