Stuart Schaeffer

Kimberly-Clark: Absorbing New Markets

Pros
1. love that historically high return on equity
2. increasing dividend for last 16 years!!!! Ka-ching
3. historically very profitable -$1b net income each year since 1998
4. great brands like Huggies, Kotex, Depends, Kleenex and Scott . Excellent revenue stream
5. Blue chip all the way!!!!

Cons
1. long-term debt doubled since 1998
2. profit margins decreasing since 1998
3. BV/share increasing at a 3.9% CAGR since 1992. Barely keeps up with inflation.
4. commodity costs will put a strain on margins in near term and for years to come.
5. Only way for company to grow is via M&As - too 'iffy' to count on. Last big M&A activity was Scott Paper in 95.

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