Should You Invest in Kimberly-Clark?

PHOTO CREDIT: Kimberly-Clark

OVERVIEW

Kimberly-Clark Corporation is a company based in the United States. The company designs, manufactures, and distributes household and personal care goods products to individual and commercial customers around the world. The company operates under the Huggies, Kleenex, K-C Professional, Kotex, and many others. The company was founded in 1872.

Why You Should?

1. Kimberly-Clark is a good reopening play in an investor’s portfolio. The company saw a drop in demand for products in its commercial division as businesses and large venues around the world shut down. Once this pandemic is over, the company will see strong demand for products in its commercial division.
2. Kimberly-Clark is also a safe investment option due to the essential nature of the products that it sells. Regardless of the economic time, consumers will still purchase things like tissues, diapers, toilet paper, and paper towels. This will benefit the company and its investors navigate through rough economic times.
3. Kimberly-Clark has an extremely diverse product portfolio, one of the reasons why its products can be found in over 175 countries around the world. The company manufactures popular products under the Huggies, Kleenex, Scotts, and other brands for both individual and commercial customers. This diverse product portfolio will benefit the company and its investors.
4. Kimberly-Clark, like other blue-chip stocks, offers a good dividend for its investors. At the moment, the company offers a dividend of $4.56, or 3.33% per stock every year. The company has also been growing this amount year over year. This makes the company a good starter investment option for investors looking for a safe and high-yielding company.

Why You Should Not?

1. The company faces tough competition in the personal care and household goods industry. Some of these competitors include Procter and Gamble, as well as store brands like Great Value (Walmart) and Kirkland Signature (Costco). This competition might hurt the company and its investors in the future.
2. The company has reported rising costs over the past couple of months. This is because of higher paper and shipping costs, caused in part because of high demand and impacts from the pandemic. Higher costs have already impacted 2 of the company’s past quarters and will continue to hurt the company until prices normalize.
3. The company’s stock price has lagged in the market performance over the past couple of months as high costs and slowing growth (in comparison to the growth the company saw during the pandemic) have hurt the company. This lagging stock price has also hurt investors in the company.

MY OPINION

I think that Kimberly-Clark is a decent long-term investment due to its position as a good reopening play, a safe investment option, a diverse product portfolio, as well as a good dividend play. However, tough competition, high costs, and a lagging stock price might hurt the company and its investors in the future.