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Prospects Look Bright for Kimberly Clark Corp (KMB)

Competition

Kimberly Clark Corp (NYSE:KMB)’s main industry peers are The Procter & Gamble Company (NYSE:PG) and The Clorox Company (NYSE:CLX). Procter & Gamble provides branded consumer packaged goods. Procter & Gamble is seen as one of the safest companies for dividend investors. Recently, this company increased its quarterly dividend to $0.6015. P&G has a long history of dividend increases. In the past year, its payout ratio stands at 56%, which offers more room for dividend increases.

The Procter & Gamble Company (NYSE:PG) has a strong financial situation to back its dividend payments. Both its top and bottom line performances are strong. Its profitability is improving as global market share trends improved. P&G is seeking to enhance profits with organic growth and cost cuttings. For this full year, P&G is expecting to generate organic growth of 4%. It is expecting to generate earning per share growth of more than 10%.

The Clorox Company (NYSE:CLX) is a manufacturer and marketer of consumer products. Clorox is also considered as a safe bet for income seekers. Recently, Clorox increased its quarterly dividend by 11% to $0.71 per share. This company is planning to sustain returns by improving productivity across its operations, increasing investments in demand-building programs and delivering meaningful product innovation.

The Clorox Company (NYSE:CLX) is seeking to achieve 4% growth in its top line by the end of this year. Additionally, this company is also working on cost saving plans to enhance operational income. It continues to expect earnings before interest and taxes margin to enlarge 25-50 basis points for the full year.

In conclusion

This industry is coming out of recession. Companies in this industry are working on cost cutting measures, innovations and emerging markets. With these plans, these companies are generating both top and bottom line performance. Kimberly Clark Corp (NYSE:KMB) is generating high bottom line performance when the top line is bit low. It has the ability to generate hefty cash flows, which is a positive sign for its dividend sustainability.

The article Prospects Look Bright for Kimberly Clark originally appeared on Fool.com and is written by siraj sarwar.

siraj sarwar has no position in any stocks mentioned. The Motley Fool recommends Kimberly-Clark and Procter & Gamble. siraj is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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