Seeking Alpha
Profile| Send Message|
( followers)

Kimberly-Clark Corporation (NYSE:KMB), incorporated in 1928, with its subsidiaries engages in the manufacturing and marketing of healthcare products on a worldwide basis. It operates in four segments: Consumer Tissue, K-C Professional, Personal Care, and Healthcare. It has manufacturing facilities in 36 countries, and its products are sold in over 175 countries.

Reasons to be bullish on Kimberly Clark (KMB):

  • A very good levered free cash flow of $1.95 billion
  • A stellar record of consecutively increasing dividends for 37 years
  • A strong quarterly earnings growth rate of 33%
  • Cash flow per share increased from $6.62 in 2009 to $7.63 in 2011.
  • It has an excellent record of returning cash to shareholders via consistent dividend payments. From 2008-2011, the company utilized cash reserves of $950 million, $986 million, $1.06 billion and $1.09 billion respectively toward dividends. Management expects to implement another increase effective from April 2012.
  • Sales increased from $19.1 billion 2009 to $20.8 billion in 2011
  • Annual EPS before NRI increased from $4.24 in 2007 to $4.80 in 2011
  • A decent dividend yield of 3.7%
  • Year over year projected growth rates of 7.3 and 7.4 for 2012 and 2013 respectively
  • A 5 year dividend growth rate of 7.3%
  • A good payout ratio of 58%
  • Zack's projects EPS to increase to $5.10 in 2012 and $5.47 in 2013. It is one of the leading manufacturers of health and hygiene products in the world with revenues in excess of $20 billion.
  • In 2011 it purchased roughly 19 million shares at a cost of $1.24 billion and in 2012 it expects to repurchase roughly $900 million-1.1 billion worth of shares
  • An excellent five year average payout ratio of 55%
  • A projected EPS growth rate for the next 3-5 years of 6.5%
  • An excellent five year ROE average of 34.6%
  • A good interest coverage ratio of 8.56
  • A decent free cash flow yield of 5.37%
  • It has a decent total three year return of 70%
  • Its cost-cutting program known as FORCE (focused on reducing costs everywhere) has led to savings of $240 million in 2009, $370 million in 2010 and over $260 million in 2011. It expects to save an additional $150-$200 million in 2012.
  • $100K invested for 10 years would have grown to $207. If dividends were reinvested the rate of return would be much higher.

Company: Kimberly Clark

Levered free cash flow = $1.95 billion.

Growth

  1. Net Income ($mil) 12/2011 = 1591
  2. Net Income ($mil) 12/2010 = 1843
  3. Net Income ($mil) 12/2009 = 1884
  1. EBITDA ($mil) 12/2011 = 3551
  2. EBITDA ($mil) 12/2010 = 3606
  3. EBITDA ($mil) 12/2009 = 3634
  4. Cash Flow ($/share) 12/2011 = 7.63
  5. Cash Flow ($/share) 12/2010 = 6.75
  6. Cash Flow ($/share) 12/2009 = 6.62
  1. Sales ($mil) 12/2011 = 20846
  2. Sales ($mil) 12/2010 = 19746
  3. Sales ($mil) 12/2009 = 19115
  1. Annual EPS before NRI 12/2007 = 4.24
  2. Annual EPS before NRI 12/2008 = 4.06
  3. Annual EPS before NRI 12/2009 = 4.72
  4. Annual EPS before NRI 12/2010 = 4.68
  5. Annual EPS before NRI 12/2011 = 4.8

Dividend history

  1. Dividend Yield = 3.7
  2. Dividend Yield 5 Year Average 12/2011 = 3.8
  3. Dividend 5 year Growth 12/2011 = 7.3

Dividend sustainability

  1. Payout Ratio 06/2011 = 0.58
  2. Payout Ratio 5 Year Average 12/2011 = 0.55

Performance

  1. Next 3-5 Year Estimate EPS Growth rate = 6.55
  2. EPS Growth Quarterly(1)/Q(-3) = -117.43
  3. ROE 5 Year Average 12/2011 = 34.66
  4. Current Ratio 06/2011 = 1.16
  5. Current Ratio 5 Year Average = 1.16
  6. Quick Ratio = 0.73
  7. Cash Ratio = 0.25
  8. Interest Coverage Quarterly = 8.56

Other interesting companies

For investors looking for other investment ideas, detailed data has been provided on four additional companies. Additionally, investors can draw some ideas from our latest article - General Electric Among 2 Attractive Dividend And 3 Growth Plays to Consider.

Company: Visa Inc-A (NYSE:V)

Levered Free Cash Flow = $2.46B

Growth

  1. Net Income ($mil) 12/2011 = 3650
  2. Net Income ($mil) 12/2010 = 2966
  3. Net Income ($mil) 12/2009 = 2353
  1. EBITDA ($mil) 12/2011 = 7856
  2. EBITDA ($mil) 12/2010 = 6535
  3. EBITDA ($mil) 12/2009 = 5575
  4. Cash Flow ($/share) 12/2011 = 6.97
  5. Cash Flow ($/share) 12/2010 = 5.65
  6. Cash Flow ($/share) 12/2009 = 4.34
  1. Sales ($mil) 12/2011 = 9188
  2. Sales ($mil) 12/2010 = 8065
  3. Sales ($mil) 12/2009 = 6911
  1. Annual EPS before NRI 12/2008 = 2.25
  2. Annual EPS before NRI 12/2009 = 2.92
  3. Annual EPS before NRI 12/2010 = 3.91
  4. Annual EPS before NRI 12/2011 = 4.99

Dividend history

  1. Dividend Yield = 0.7
  2. Dividend 3 year Growth =30%

Dividend sustainability

  1. Payout Ratio 06/2011 = 0.17
  2. Payout Ratio 5 Year Average 06/2011 = 0.15

Performance

  1. Next 3-5 Year Estimate EPS Growth rate = 16.43
  2. EPS Growth Quarterly(1)/Q(-3) = -121.14
  3. ROE 5 Year Average 06/2011 = 11.12
  4. Current Ratio 06/2011 = 2.82
  5. Quick Ratio = 2.66
  6. Cash Ratio = 2.38
  7. Interest Coverage Quarterly = 162.7

Company: Pennant Park Investment Corporation (NASDAQ:PNNT)

Growth

  1. Net Income ($mil) 12/2011 = 10
  2. Net Income ($mil) 12/2010 = 17
  3. Net Income ($mil) 12/2009 = 36
  1. EBITDA ($mil) 12/2011 = 4
  2. EBITDA ($mil) 12/2010 = 12
  3. EBITDA ($mil) 12/2009 = 33
  4. Cash Flow ($/share) 12/2011 = 1.01
  5. Cash Flow ($/share) 12/2010 = 0.88
  6. Cash Flow ($/share) 12/2009 = 0.78
  1. Sales ($mil) 12/2011 = 92
  2. Sales ($mil) 12/2010 = 60
  3. Sales ($mil) 12/2009 = 45
  1. Annual EPS before NRI 12/2007 = 0.35
  2. Annual EPS before NRI 12/2008 = 0.35
  3. Annual EPS before NRI 12/2009 = 1.08
  4. Annual EPS before NRI 12/2010 = 1.09
  5. Annual EPS before NRI 12/2011 = 1.25

Dividend history

  1. Dividend Yield = 11.30
  2. Dividend Yield 5 Year Average 12/2011 = 11.54
  3. Dividend 5 year Growth 12/2011 = 8.53

Dividend sustainability

  1. Payout Ratio 06/2011 = 0.88
  2. Payout Ratio 5 Year Average 12/2011 = 0.95

Performance

  1. Percentage Change Price 52 Weeks Relative to S&P 500 = -14.56
  2. Next 3-5 Year Estimate EPS Growth rate = 10
  3. EPS Growth Quarterly(1)/Q(-3) = -103.13
  4. ROE 5 Year Average 12/2011 = 9.35
  1. Current Ratio 06/2011 = 0.91
  2. Current Ratio 5 Year Average = 0.95
  3. Quick Ratio = 1.14
  4. Cash Ratio = 1
  5. Interest Coverage Quarterly = 2.6

Company: Leggett & Platt (NYSE:LEG)

Basic Key ratios

  1. Percentage Held by Insiders = 2.21
  2. Number of Institutional Sellers 12 Weeks = 7
  3. Relative Strength 52 weeks = 41
  4. Dividend 5-year Growth = 6.52
  5. Cash Flow 5 -year Average = 2.17
  6. Dividend Yield 5-Year Average = 5.18

Growth

  1. Net Income ($mil) 12/2011 = 153
  2. Net Income ($mil) 12/2010 = 177
  3. Net Income ($mil) 12/2009 = 112
  1. EBITDA ($mil) 12/2011 = 361
  2. EBITDA ($mil) 12/2010 = 416
  3. EBITDA ($mil) 12/2009 = 369
  4. Cash Flow ($/share) 12/2011 = 2.02
  5. Cash Flow ($/share) 12/2010 = 2.05
  6. Cash Flow ($/share) 12/2009 = 1.78
  1. Sales ($mil) 12/2011 = 3636
  2. Sales ($mil) 12/2010 = 3359
  3. Sales ($mil) 12/2009 = 3055
  1. Annual EPS before NRI 12/2007 = 1.18
  2. Annual EPS before NRI 12/2008 = 0.88
  3. Annual EPS before NRI 12/2009 = 0.86
  4. Annual EPS before NRI 12/2010 = 1.16
  5. Annual EPS before NRI 12/2011 = 1.12

Dividend history

  1. Dividend Yield = 5.38
  2. Dividend Yield 5 Year Average 12/2011 = 5.18
  3. Dividend 5 year Growth 12/2011 = 6.52

Dividend sustainability

  1. Payout Ratio 09/2011 = 0.95
  2. Payout Ratio 5 Year Average 12/2011 = 1.01

Performance

  1. Next 3-5 Year Estimate EPS Growth rate = 15
  2. EPS Growth Quarterly(1)/Q(-3) = -100
  3. 5 Year History EPS Growth 12/2011 = 0.44
  4. ROE 5 Year Average 12/2011 = 9.97
  5. Current Ratio 12/2011 = 2.16
  6. Current Ratio 5 Year Average = 2.35
  7. Quick Ratio = 1.34
  8. Cash Ratio = 0.48
  9. Interest Coverage Quarterly = 9.56

Company: Terra Nitrogen (NYSE:TNH)

Basic Key ratios

  1. Percentage Held by Insiders = 1.95
  2. Relative Strength 52 weeks = 96
  3. Dividend 5-year Growth = 2.59
  4. Cash Flow 5 -year Average = 13.26
  5. Dividend Yield 5-Year Average = 8.55

Growth

  1. Net Income ($mil) 12/2011 = 508
  2. Net Income ($mil) 12/2010 = 202
  3. Net Income ($mil) 12/2009 = 144
  1. EBITDA ($mil) 12/2011 = 528
  2. EBITDA ($mil) 12/2010 = 219
  3. EBITDA ($mil) 12/2009 = 161
  4. Cash Flow ($/share) 12/2011 = 29.1
  5. Cash Flow ($/share) 12/2010 = 11.83
  6. Cash Flow ($/share) 12/2009 = 8.69
  1. Sales ($mil) 12/2011 = 799
  2. Sales ($mil) 12/2010 = 565
  3. Sales ($mil) 12/2009 = 508
  1. Annual EPS before NRI 12/2007 = 10.9
  2. Annual EPS before NRI 12/2008 = 14.9
  3. Annual EPS before NRI 12/2009 = 5.4
  4. Annual EPS before NRI 12/2010 = 8.02
  5. Annual EPS before NRI 12/2011 = 15.9

Dividend history

  1. Dividend Yield = 8.91
  2. Dividend Yield 5 Year Average 12/2011 = 8.55
  3. Dividend 5 year Growth 12/2011 = 2.59

Dividend sustainability

  1. Payout Ratio 09/2011 = 1.08
  2. Payout Ratio 5 Year Average 12/2011 = 0.99

Performance

  1. Next 3-5 Year Estimate EPS Growth rate = N/A
  2. EPS Growth Quarterly(1)/Q(-3) = -124.01
  3. 5 Year History EPS Growth 12/2011 = 3.21
  4. ROE 5 Year Average 12/2011 = 132.33
  1. Current Ratio 12/2011 = 4.63
  2. Current Ratio 5 Year Average = 3.44
  3. Quick Ratio = 6.22
  4. Cash Ratio = 6.2
  5. Interest Coverage Quarterly = N/A

Conclusion

The markets are still in a corrective phase and will most likely remain volatile for the better part of the second quarter. Long-term investors can use strong pullbacks to slowly start deploying money into long-term investments. One of the best ways to do this is by selling naked puts at strikes you would not mind owning the stock at. For those not familiar with the concept of selling puts, our recent article should serve as a primer on the subject - A Naked Put Strategy For Denbury Resources.

Disclaimer

This list of stocks is meant to serve as a starting point. Please do not treat this as a buying list. It is imperative that you do your due diligence and then determine if any of the above plays meet with your risk tolerance levels. The Latin maxim caveat emptor applies - let the buyer beware.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Additional disclosure: EPS and Price vs. industry charts obtained from zacks.com. A major portion of the historical data used in this article was obtained from zacks.com. Earnings estimate and growth charts sourced from dailyfinance.com.

Source: Kimberly Clark 1 Of 5 Eye Catching Dividend Plays