KMB  Kimberly-clark Corporation

Exchange

NYSE

Sector

Consumer Durables

Industry

Containers/Packaging

Market Cap.

45.97B

Vuru Grade

51.28/100

Current Price

$129.51
+0.11 (+0.09%)

Growth Price

$46.42
Overvalued by 64.16%

Stability Price

$12.83
Overvalued by 90.09%

Company Metrics

  • P/E 21.37
  • P/S 2.52
  • P/B 337.86
  • EPS 6.06
  • Cash ROIC 20.64%
  • Cash Ratio 0.16
  • Dividend 3.88 / 3.00 %
  • Avg. Vol. 1.75M
  • Shares 354.95M
  • Market Cap. 45.97B

Company Description

Kimberly-Clark Corporation, together with its subsidiaries, engages in the manufacture and marketing of various health care products worldwide. The company operates in four segments: Personal Care, Consumer Tissue, K-C Professional & Other, and Health Care. The Personal Care segment provides disposable diapers, training and youth pants, and swimpants; baby wipes; and feminine and incontinence care... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

How Kimberly Clark Corp Makes Most of Its Money
Motley Fool - May 23, 2017
In its last fiscal year, global consumer products giant Kimberly-Clark (NYSE:KMB) generated just over $2 billion of net income from its revenue base of $18.2 billion.
Kimberly Clark Corp (KMB) Given Coverage Optimism Score of 0.30 - The Cerbat Gem
Kimberly Clark Corp (KMB) Announces Quarterly Earnings Results - Sports Perspectives
Why I Would Not Buy Kimberly-Clark Right Now
Seeking Alpha - May 26, 2017
Kimberly-Clark (NYSE:KMB) has remarkably underperformed S&P (NYSEARCA:SPY) during the last 12 months. To be sure, while S&P has advanced 15%, the stock has remained essentially flat.
Kimberly Clark Corp (KMB) Earning Somewhat Positive Media Coverage, Report Shows - The Cerbat Gem
Is buying Kimberly-Clark Corporation (KMB) for its upcoming $0.97 dividend a ... - Simply Wall St
Better Buy: PepsiCo, Inc. vs. Kimberly-Clark Corp
Motley Fool - May 24, 2017
Kimberly-Clark operates on a smaller scale, but unlike Pepsi, it's tops in its category. The Kleenex brand-name alone is ubiquitous for any facial tissue.
4 Key Quotes From Kimberly Clark Corp's Earnings Call
Motley Fool - May 8, 2017
Kimberly-Clark endured flat market share in its baby care segment, which is home to the Huggies diaper brand. The company also lost ground in tissues as it scaled back on price cuts in the Kleenex brand.
Better Buy: Kimberly-Clark Corporation vs. Philip Morris International
Motley Fool - May 16, 2017
Two top names from that sector are Kimberly-Clark (NYSE:KMB) and Philip Morris International (NYSE:PM), which both recovered from big market meltdowns before.
Kimberly-Clark Recognized by CSO50 for Excellence in Cybersecurity Awareness
PR Newswire (press release) - May 4, 2017
DALLAS, May 4, 2017 /PRNewswire/-- Kimberly-Clark Corporation has been recognized for its excellence in cybersecurity awareness with a prestigious CSO50 Award at the annual CSO50 Conference in Scottsdale.
Kimberly-Clark In The Garden Portfolio
Seeking Alpha - May 10, 2017
As I've written about, most recently in Tending the Dividend Garden - March Update, I like to group my stocks into several categories that I relate to crops from my garden.
Kimberly-Clark Sues to Force Spinoff to Pay $350 Million Surgical Garb Damages
Insurance Journal - May 8, 2017
Kimberly-Clark Corp. sued its spinoff Halyard Health Inc. claiming it wrongfully refused to pick up the entire tab for a $454 million verdict against the companies over the safety of some of their surgical gowns.
Hiring and Managing Outside Counsel at Halyard Health - Daily Report (registration)
Kimberly-Clark Sues Halyard Over $454 Million Gown Verdict
Bloomberg - May 2, 2017
Kimberly-Clark Corp. sued its spinoff Halyard Health Inc. claiming it wrongfully refused to pick up the entire tab for a $454 million verdict against the companies over the safety of some of their surgical gowns.
Kimberly-Clark Sues Halyard Over $350M Verdict Duty Claim - Law360 (subscription)
Kimberly-Clark Awards $1.08 Million in College Scholarships to High School ...
PR Newswire (press release) - May 1, 2017
DALLAS, May 1, 2017 /PRNewswire/ -- Kimberly-Clark celebrates its 25th year of the Bright Futures Scholarship Program by awarding $1.08 million in college scholarships this year to 54 children of Kimberly-Clark employees across 18 states and Canada.
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for KMB to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate KMB's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$129.51 Current Price

$46.42 Growth Price (DCF)

Overvalued by 64.16%


Growth Rate Assumed by Market: 26.03%


Future Free Cash Flow Growth Rate: 1.2%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$12.83 Stability Price (EPV)

Overvalued by 90.09%


Discount Rate: 15.0%

$9.70 Book Price

Overvalued by 92.51%


Excellent Cash Return on Invested Capital over the past 5 years

KMB has efficiently invested its financial resources in buildings, projects, and equipment, resulting in strong returns. Annual Reports can be useful in identifying the cause of one-time events and future sustainability.

KMB has created $20.64 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20122013201420152016
Free Cash Flow 2.20B 2.09B 1.81B 1.25B 2.46B
divided by
Invested Capital 12.68B 12.02B 8.51B 7.87B 7.83B
Cash ROIC 17.32% 17.37% 21.22% 15.88% 31.42%

Varying Return on Equity over the past 5 years

KMB has generated strong profits with money shareholders have invested. However, there is a substantial variation in their Return on Equity from year-to-year. This may reflect management's inability to generate consistent returns or may be caused by one-time events. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

KMB has generated $60.24 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20122013201420152016
Net Income 1.83B 2.22B 1.60B 1.07B 2.22B
divided by
Stockholders' Equity 4.99B 4.86B 729.00M -174.00M -102.00M
Return on Equity 36.67% 45.74% 218.79% - -

Excellent Business Performance over the past 10 years

KMB has been able to maintain profitability in good times and bad. This could mean KMB has an extremely strong business or has the ability to scale down costs when needed. This should be a fairly resilient business, but double check for future sustainability by looking at its Risk Factors in the Annual Report.

KMB has created positive free cash flow for 9 or more of the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Free Cash Flow 1.44B 1.61B 2.63B 1.78B 1.32B 2.20B 2.09B 1.81B 1.25B 2.46B

Very Weak Balance Sheet

KMB is in a poor financial position. This could be due to a slowdown in sales, indulging in debt-fuelled growth, or the nature of KMB's business. If it is highly capital intensive (see Economic Moat), they likely have to outlay significant capital just to stay competitive. This habit often destroys more value than it creates.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Cash 472.70M 364.00M 987.00M 876.00M 764.00M 1.11B 1.05B 789.00M 619.00M 923.00M
Current Assets 6.10B 5.81B 5.86B 6.33B 6.28B 6.59B 6.55B 5.56B 5.43B 5.12B
Total Assets 18.44B 18.09B 19.21B 19.86B 19.37B 19.87B 18.92B 15.53B 14.84B 14.60B
Current Liabilities 4.93B 4.75B 4.92B 5.34B 5.40B 6.09B 5.85B 6.23B 6.35B 5.85B
Total Liabilities 13.22B 14.21B 13.80B 13.95B 14.12B 14.89B 14.06B 14.80B 15.02B 14.70B
Stockholder' Equity 5.22B 3.88B 5.41B 5.92B 5.25B 4.99B 4.86B 729.00M -174.00M -102.00M
Current Ratio 1.24 1.22 1.19 1.19 1.16 1.08 1.12 0.89 0.85 0.87
TL-to-TA 0.72 0.79 0.72 0.70 0.73 0.75 0.74 0.95 1.01 1.01

Low or No Reinvestment of Profits over the past 10 years

KMB has either been retaining a small amount of their earnings or has done so inconsistently. A lack of consistency could be due to KMB operating at a loss or them having such a strong economic moat they feel comfortable spending profits on growth. Be wary of future prospects and if applicable, inspect the moat's sustainability.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Retained Earnings 8.75B 9.47B 10.33B 11.09B 8.24B 8.82B 9.71B 8.47B 4.99B 5.83B
Retained Earnings Growth - 8.20% 9.13% 7.33% -25.64% 7.02% 10.10% -12.81% -41.04% 16.76%

Competitive Industry over the past 10 years

KMB is likely operating in an industry with medium to low barriers to entry. This may mean that KMB doesn't have a characteristic that's hard to replicate, such as exclusive distribution, branding or the ability to keep costs low. If Gross Margins are at least satisfactory, it's likely that KMB invests heavily in R&D and Sales, General & Administrative expenses.

Only $9.18 of every $100 of Revenue have been profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income 1.82B 1.70B 1.99B 1.94B 1.59B 1.83B 2.22B 1.60B 1.07B 2.22B
divided by
Revenue 18.27B 19.42B 19.12B 19.75B 20.85B 21.06B 21.15B 19.72B 18.59B 18.20B
Net Profit Margin 9.98% 8.75% 10.43% 9.84% 7.63% 8.68% 10.50% 8.09% 5.73% 12.19%

Satisfactory Pricing Power over the past 10 years

Consistency is vital. KMB has been able to maintain gross margins fairly consistently, which is a strong indication of their ability to raise prices with inflation. This potentially leaves flexibility in inflationary environments to raise prices on consumers and maintain profitability.

$33.00 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Gross Profit 5.70B 5.86B 6.42B 6.55B 6.15B 6.75B 7.24B 6.68B 6.62B 6.65B
divided by
Revenue 18.27B 19.42B 19.12B 19.75B 20.85B 21.06B 21.15B 19.72B 18.59B 18.20B
Gross Margin 31.23% 30.17% 33.59% 33.17% 29.51% 32.04% 34.23% 33.88% 35.63% 36.54%

High Capital Intensity over the past 10 years

KMB spends large amounts of capital buying new equipment or investing in new facilities to stay competitive. Over the long term, those costs may have to be fuelled by debt. Look at the growth of Shareholders' Equity to see if this strategy is having a positive or negative impact.

56.23% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Capital Expenditure 989.30M 906.00M 848.00M 964.00M 968.00M 1.09B 953.00M 1.04B 1.06B 771.00M
divided by
Net Income 1.82B 1.70B 1.99B 1.94B 1.59B 1.83B 2.22B 1.60B 1.07B 2.22B
Capital Expenditure Ratio 54.27% 53.36% 42.53% 49.61% 60.84% 59.79% 42.91% 65.14% 99.06% 34.75%

Very Strong Dividend History over the past 10 years

KMB has consistently distributed a dividend for at least the past 10 years. Such a long dividend history suggests KMB is very established in its market and that its dividend distribution is likely to continue for a significant period of time.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Dividend Paid 932.90M 950.00M 986.00M 1.07B 1.10B 1.15B 1.22B 1.26B 1.27B 1.31B
divided by
Shares Outstanding 445.70M 418.60M 416.80M 414.40M 398.60M 396.10M 387.30M 377.40M 366.30M 361.70M
Dividend Paid Per Share 2.09 2.27 2.37 2.57 2.76 2.91 3.16 3.33 3.47 3.62
Price at Year End 59.28 46.38 59.19 60.47 73.56 83.13 105.93 117.35 129.43 114.12
Dividend Yield 3.53% 4.89% 4.00% 4.25% 3.75% 3.50% 2.98% 2.84% 2.68% 3.18%

Strong History of Stock Buybacks over the past 10 years

KMB has a strong history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Shares Outstanding 445.70M 418.60M 416.80M 414.40M 398.60M 396.10M 387.30M 377.40M 366.30M 361.70M
Stock Bought Back - 6.47% 0.43% 0.58% 3.96% 0.63% 2.27% 2.62% 3.03% 1.27%
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