Chief Investment Strategist
Why Kimberly-Clark is a Washed Up Dividend Aristocrat
Brett Owens, Chief Investment StrategistUpdated: October 27, 2015
Consistently growing sales of diapers, paper towels, and tissues have padded the pockets of Kimberly-Clark (KMB) shareholders since the company went public in 1928. KMB has paid a dividend for 81 years in a row, and raised it for 43 straight years and counting. But this streak is in danger if the company can’t peddle more paper products soon.
In 2014, KMB paid out 70% of its free cash flow (FCF) – 86% of its earnings – in dividends. And while its FCF lingers near 2010 levels, the company has increased its dividend by 18% since then. As management “keeps the streak alive” it’s taking on debt to fund shareholder rewards – ever increasing dividends and share buybacks.… Read more