Consumer products giant Kimberly-Clark (NYSE:KMB) reported impressive profit growth during its first quarter. The growth was above what the company will report over the coming few years, but the fundamentals of its global operations remain sound, as does the steady and ample dividend payment.

Investopedia Broker Guides: Enhance your trading with the tools from today's top online brokers.

First Quarter Recap
Net sales advanced 4% to $5.2 billion. Organic sales increased 6%, led by 13% growth internationally. The personal care unit, which includes Huggies that competes with Procter & Gamble's (NYSE:PG) Pampers brand, reported sales growth of 8.2% to $2.4 billion, or approximately 46% of the total top line. Consumer tissue, such as Kleenex, is the next largest segment and saw sales fall a modest 0.9% to account for nearly a third of total sales. The professional and health care segments reported growth around 4%.

Consolidated operating profits jumped nearly 29% and stemmed from lower product costs and other cost efficiencies. Every unit reported positive profit growth but consumer tissue was the standout with a gain of almost 45% to $217 million. Professional reported a 20% increase while personal care posted respectable gains of close to 3%. A comparatively modest tax expense increase resulted in net income growth of 33.7% and total earnings of $468 million, or $1.18 per diluted share.

SEE: Understanding The Income Statement

Outlook and Valuation
Analysts currently project flattish full year sales, with growth of less than 1% and total sales of nearly $21 billion. The consensus earnings projection currently stands at $5.10 per share. At a current share price around $76.50, this places the forward P/E right at 14.

The Bottom Line
Kimberly-Clark's earnings multiple isn't overly compelling and is right about at the market average and its average range over the past five years. However, the dividend yield of 3.90% will likely appeal to income-minded investors, as will its sales stability and global diversification. For the most part, the same can be said for the peer group that includes P&G, Colgate-Palmolive (NYSE:CL), Clorox (NYSE:CLX), and Unilever (NYSE:UN) (NYSE:UL).

SEE: 5 Must-Have Metrics For Value Investors

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

At the time of writing, Ryan C. Fuhrmann did not own shares in any of the companies mentioned in this article.

Related Articles
  1. Stock Analysis

    Net Neutrality: Pros and Cons

    The fight over net neutrality has become an amazing spectacle. But at its core, it's yet another skirmish in cable television's war to remain relevant.
  2. Markets

    Why Gluten Free Is Now Big Business

    Is it essential to preserving your health, or just another diet fad? Either way, gluten-free foods have become big business.
  3. Professionals

    Chinese Slowdown Affects Iron Ore Market

    The Chinese economy's ongoing slowdown is having a major impact on iron ore demand.
  4. Personal Finance

    A Day in the Life of an Equity Research Analyst

    What does an equity research analyst do on an everyday basis?
  5. Mutual Funds & ETFs

    ETF Analysis: PowerShares S&P 500 Downside Hedged

    Find out about the PowerShares S&P 500 Downside Hedged ETF, and learn detailed information about characteristics, suitability and recommendations of it.
  6. Mutual Funds & ETFs

    ETF Analysis: ProShares Large Cap Core Plus

    Learn information about the ProShares Large Cap Core Plus ETF, and explore detailed analysis of its characteristics, suitability and recommendations.
  7. Mutual Funds & ETFs

    ETF Analysis: iShares Core Growth Allocation

    Find out about the iShares Core Growth Allocation Fund, and learn detailed information about its characteristics, suitability and recommendations.
  8. Mutual Funds & ETFs

    ETF Analysis: iShares MSCI USA Minimum Volatility

    Learn about the iShares MSCI USA Minimum Volatility exchange-traded fund, which invests in low-volatility equities traded on the U.S. stock market.
  9. Stock Analysis

    Should You Follow Millionaires into This Sector?

    Millionaire investors—and those who follow them—should take another look at the current economic situation before making any more investment decisions.
  10. Professionals

    What to do During a Market Correction

    The market has corrected...now what? Here's what you should consider rather than panicking.
RELATED TERMS
  1. Equity

    The value of an asset less the value of all liabilities on that ...
  2. Hard-To-Sell Asset

    An asset that is extremely difficult to dispose of either due ...
  3. Sucker Yield

    When an investor has essentially risked all of his capital for ...
  4. PT (Perseroan Terbatas)

    An acronym for Perseroan Terbatas, which is Limited Liability ...
  5. Ltd. (Limited)

    An abbreviation of "limited," Ltd. is a suffix that ...
  6. BHD (Berhad)

    The suffix Bhd. is an abbreviation of a Malay word "berhad," ...
RELATED FAQS
  1. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  2. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  3. How does additional paid in capital affect retained earnings?

    Both additional paid-in capital and retained earnings are entries under the shareholders' equity section of a company's balance ... Read Full Answer >>
  4. What types of capital are not considered share capital?

    The money a business uses to fund operations or growth is called capital, and there are a number of capital sources available. ... Read Full Answer >>
  5. What is the difference between issued share capital and subscribed share capital?

    The difference between subscribed share capital and issued share capital is the former relates to the amount of stock for ... Read Full Answer >>
  6. What happens to the shares of stock purchased in a tender offer?

    The shares of stock purchased in a tender offer become the property of the purchaser. From that point forward, the purchaser, ... Read Full Answer >>

You May Also Like

COMPANIES IN THIS ARTICLE
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!