Personal care products provider Kimberly-Clark Corporation (NYSE:KMB)’s shares are down by 17% over the past year and are up by 9% year-to-date. It is currently undergoing a major transformation through acquiring Kenvue. Cramer has discussed Kimberly-Clark Corporation (NYSE:KMB)’s acquisition several times and linked its performance with consumer goods giant Procter & Gamble. In his morning appearance on August 6th, the CNBC TV host discussed Kimberly-Clark Corporation (NYSE:KMB)’s earnings and the tailwinds from the acquisition:
“I like the way Kimberly acted, even though they had a asterisk China diaper problem which I did not know about. The stock started down and then finished up nicely. I think that Chu is doing is a nice job. I think that Kenvue acquisition’s going to be very good. Proctor was not as good, so I think that maybe you’re going to start seeing, even though Proctor’s much bigger than Kimberly, maybe we’re going to have a new colossus.”
On the 4th, Kimberly-Clark Corporation (NYSE:KMB) had reported its second quarter earnings to post $4.19 billion in revenue that missed analyst estimates of $4.22 billion. Yet, the firm also cut its organic sales growth and earnings forecasts. Yet, the shares close 3.7% higher on the 4th, exhibiting solid momentum after the report hit the wires before market open.
Kimberly-Clark Corporation (NYSE:KMB)’s business model, i.e., selling personal care products, is resistant in a tough economy as consumers continue to spend on its products even if they reduce discretionary spending. Cramer’s previous comments about the firm have also noted this, but the firm’s sluggish revenue performance in the second quarter opens up concerns about its growth. Additionally, turmoil in the oil market stemming from the Iran war and other factors can stress its margins. This stress, at a time when Kimberly-Clark Corporation (NYSE:KMB) might have to deal with high debt levels as well. Consequently, 15% of the float being short as of July-end is unsurprising.
On the other hand, the difference between Kimberly-Clark Corporation (NYSE:KMB) and Procter & Gamble Company (NYSE:PG) is visible when we compare their forward P/E. While the former has a multiple of 14.93, the latter is valued better through a 20.9 multiple. Procter & Gamble Company (NYSE:PG)’s ability to sustain high prices courtesy of its brand strength and market share (60% in blades and razors and 45% to 50% in fabric) is one of its strongest suits. It enables the firm to deliver stable revenue growth, as evidenced by a 2% jump in its June quarter sales. Additionally, Procter & Gamble Company (NYSE:PG)’s stable defensive market lead it to commit to stable stock buybacks ($6 billion to $7 billion in FY27) and stable dividends (2.48% yield). Naturally, the P/E is higher, and the short interest is negligible at 1.17% of the float.
The differences between the two, and Procter & Gamble Company (NYSE:PG)’s advantages are also clear in hedge fund sentiment. As of Q1 2026, 59 funds tracked by Insider Monkey had held a stake in Kimberly-Clark Corporation (NYSE:KMB). On the other hand, 78 had held a stake in Procter & Gamble Company (NYSE:PG).
While Insider Monkey acknowledges the risk and potential of KMB as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than KMB that has 100x upside potential, check out our report about the cheapest AI stock.
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Disclosure: None.
