What investors need to know about KMB
Kimberly-Clark Corporation (NYSE: KMB) is an American multinational personal care corporation that produces mostly paper-based consumer products. KMB manufactures sanitary paper products and surgical & medical instruments for consumers worldwide. Kimberly-Clark’s brands includes Huggies, Kleenex, Scott, Kotex, and Cottonelle.
Its been a choppy year for Kimberly-Clark stock, which has increased just about 7% year-over-year and is up 3.2% year-to-date. The security staged a rebound off a familiar floor at the $128 level in late-October, with recent support at the 20-day moving average guiding shares higher. The $142 level, which has served as a ceiling since October 2020, is still looming overhead, however.
Sentiment surrounding KMB is mixed. Analysts are hesitant, with just one of the 12 in coverahe calling it a "strong buy," with the remaing 11 at a "hold" or worse. Meanwhile, the stock sports a 50-day put/call volume ratio of 1.22 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than 96% of readings from the past 12 months, implying a much healthier-than-usual appetite for long calls of late.
Moreover, Kimberly-Clark offers a forward dividend of $4.56 with a solid dividend yield of 3.23%, making it an option for long-term investors despite having a fairly high valuation. Kimberly-Clark stock currently trades at a price-earnings ratio of 23.65 and a price-sales ratio of 2.39. However, KMB also has a forward price-earnings ratio of 18.73 which indicates an expected increase in earnings and presenting a better value.
Nonetheless, KMB has only increased revenues 6% since fiscal 2017, despite maintaining consistent annual top-line growth in recent years. Kimberly-Clark has also struggled to find consistency on the bottom-line, experiencing a 12% decrease in net income since fiscal 2017. In addition, KMB has a weak balance sheet with just $286 million in cash and nearly $9 billion in total debt, making Kimberly-Clark stock one of the riskiest large-cap stocks available on the market from a fundamental point of view.