From time to time I play with stock screeners looking for names with steady cash flows, at least modest growth prospects, and reasonably good payouts. Kimberly Clark (NYSE:KMB) seemed like a good idea at the time: it didn’t occur to me that a consumer nondurable with such strong brands would get walloped by generic brands.
It tells you something about the state of American households when companies like Kimberly Clark, Campbell’s Soup (NYSE:CPB), and General Mills (NYSE:GIS) underperform. It means that people are skimping even on canned soup and breakfast cereal.
What concerns me about the state of the economy is the cumulative impact of years of high unemployment. A fifth of working-age Americans (actually over 22%) can’t find full-time work. How many households are scraping along on one income rather than two, part-time work rather than full-time work, the declining income of a small proprietorship, and gradually losing ground? How many families appear to be surviving simply because they are living gratis for the moment in homes that haven’t been foreclosed, but which must be foreclosed eventually? How many retirees with their savings in CD’s or short-term bonds find that they can’t pay the bills with interest rates at next to nothing?