April 29, 2025 a 03:31 am
KMB: Dividend Analysis - Kimberly-Clark Corporation
Kimberly-Clark Corporation, a key player in the personal care sector, continues to impress with its stable dividend yield and exceptional history of payouts. The corporation's commitment to shareholder value is reflected in its steady dividend payments over 41 years, highlighting its robust financial health and corporate stability. With moderate growth potential, it remains an appealing choice for income-seeking investors.
📊 Overview
Kimberly-Clark operates within the Consumer Goods sector which is traditionally known for stable dividends. It's notable not just for its products but for its commitment to returning wealth to its shareholders. Let's delve into the figures:
| Key Metrics | Details |
|---|---|
| Sector | Consumer Goods |
| Dividend yield | 3.40 % |
| Current dividend per share | 4.83 USD |
| Dividend history | 41 years |
| Last cut or suspension | None |
🗣️ Dividend History
The strong dividend history of Kimberly-Clark is a testament to its operational resilience and market presence. Sustaining and growing dividends over decades signals a mature and efficient capital allocation strategy by the management. This consistency is a reliable indicator for investors focused on income generation.
| Year | Dividend Per Share (USD) |
|---|---|
| 2025 | 1.26 |
| 2024 | 4.88 |
| 2023 | 4.72 |
| 2022 | 4.64 |
| 2021 | 4.56 |
📈 Dividend Growth
Analyzing the growth in dividends reveals insights into the company's future payout capabilities. A modest upward trajectory indicates a sustainable policy aligned with earnings growth without compromising reinvestments.
| Time | Growth |
|---|---|
| 3 years | 2.29 % |
| 5 years | 3.44 % |
The average dividend growth is 3.44% over 5 years. This shows moderate but steady dividend growth.
✅ Payout Ratio
Evaluating payout ratios provides crucial insights into the safety and sustainability of dividend payouts. It's imperative that these ratios remain aligned with sectorial norms to ensure financial flexibility in retaining sufficient earnings for growth and reinvestment.
| Key figure | Ratio |
|---|---|
| EPS-based | 65.01 % |
| Free cash flow-based | 61.73 % |
With an EPS payout ratio of 65.01% and an FCF payout ratio of 61.73%, both metrics are comfortably within manageable limits ensuring that's dividends are well supported by earnings and cash flows.
💧 Cashflow & Capital Efficiency
Cash flow indicators and capital efficiency ratios are vital in assessing the underlying earnings power and resource utilization of a corporation. They highlight how effectively a company is converting assets and investments into profits and free cash flows.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 5.69 % | 6.75 % | 4.05 % |
| Earnings Yield | 5.76 % | 4.29 % | 4.22 % |
| CAPEX to Operating Cash Flow | 22.29 % | 21.63 % | 32.05 % |
| Stock-based Compensation to Revenue | 0.65 % | 0.83 % | 0.74 % |
| Free Cash Flow / Operating Cash Flow Ratio | 77.71 % | 78.37 % | 67.95 % |
The consistent cash flow generation supports dividend coverage comfortably, signaling a strong capacity to reinvest and reward shareholders simultaneously.
⚖️ Balance Sheet & Leverage Analysis
A sound balance sheet is crucial for maintaining financial flexibility and surviving economic downturns. General leverage metrics help in evaluating the financial structure's strength and the company’s capacity to meet its debt obligations.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 9.02 | 8.87 | 15.40 |
| Debt-to-Assets | 45.78 % | 46.78 % | 46.87 % |
| Debt-to-Capital | 90.02 % | 89.87 % | 93.90 % |
| Net Debt to EBITDA | 1.65 | 2.29 | 2.37 |
| Current Ratio | 76.3 % | 82.3 % | 78.1 % |
| Quick Ratio | 53.7 % | 54.1 % | 47.2 % |
| Financial Leverage | 19.7 | 18.95 | 32.85 |
The company maintains a prudent approach with leverage, although net debt to EBITDA is slightly elevated, suggesting a balanced but watchful eye on debt management.
🔍 Fundamental Strength & Profitability
Profitability metrics and efficiency ratios provide insight into the company’s core business health, indicating management efficiency in generating revenue from its resources and overall operational performance.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 3.03 % | 1.93 % | 3.54 % |
| Return on Assets | 15.4 % | 10.2 % | 10.8 % |
| Margins: Net | 12.7 % | 8.6 % | 9.6 % |
| Margins: EBIT | 13.9 % | 11.3 % | 13.0 % |
| Margins: EBITDA | 19.8 % | 15.0 % | 16.7 % |
| Margins: Gross | 35.8 % | 34.4 % | 30.8 % |
| Research & Development to Revenue | 0 % | 1.53 % | 1.45 % |
The profitability margins indicate robust earnings capabilities across key categories although R&D to Revenue suggests below par innovation investments, worthwhile monitoring for future growth perspectives.
📉 Price Development
🌟 Dividend Scoring System
The following scoring system evaluates critical aspects of Kimberly-Clark's dividend health:
| Category | Score | Indication |
|---|---|---|
| Dividend yield | 4 | |
| Dividend Stability | 5 | |
| Dividend growth | 4 | |
| Payout ratio | 3 | |
| Financial stability | 3 | |
| Dividend continuity | 5 | |
| Cashflow Coverage | 3 | |
| Balance Sheet Quality | 3 |
Total Score: 30/40
🔍 Rating
The robust dividend history coupled with a consistent payout increases and a sustainable payout ratio means Kimberly-Clark maintains its reputation as a strong dividend payer. This investment should appeal to income-focused portfolios, although potential investors should watch leverage and R&D expenditures closely. Overall, a reliable choice with moderate growth expectations.