View Full Version : Stock of the Day: Kimberly Clark KMB

James Boston
06-28-2005, 12:22 PM
She won American Idol...nuff said.

Seriously though check it out:

P/E : 17.43
Div Yield: 4.42%
ROE : 26.34%

FCF growth looks pretty good and the debt is manageable. It's probably a tad too expensive, but still maybe one to watch? Thoughts?

06-28-2005, 03:43 PM
I'm neutral on this one. Their P/E is actually lower than the industry average according to Yahoo! Finance (http://finance.yahoo.com/q/co?s=PG), but I wouldn't say that they're undervalued. They have lower margins and earnings growth than competitors like Johnson & Johnson (JNJ) and Proctor & Gamble (PG) resulting in a PEG that is actually the highest amongst the three. Their dividend yield is nice, so I'd recommend this stock for income investors who are looking for a healthy dividend check in the mail. Otherwise, I would rather own either JNJ or PG.

James Boston
06-28-2005, 05:30 PM
I would rather own either JNJ or PG.

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For the record I do own PG and plan to buy up some more soon.

KMB is showing a P/S slightly better then PG and much better than JNJ, so I think JNJ is likely the most over-valued of the bunch, but I haven't looked that closely.

Would it be unreasonable to guess a split might occur in the next few years?

06-28-2005, 06:09 PM
I own all 3. Kimberly Clark is cheaper then the other two and a much smaller company. I like all 3. So far Kimberly Clark is performing the worst but I like the valuation here and am considering buying more. I would not be surprised to see it outperform the others going forward.

James Boston
06-28-2005, 08:38 PM
I just had a little time to look at this one more closely. I'm estimating it's valued at about 60% of its intrinsic value. Generating $1 in sales for every $1.96 in value. The only thing I haven't done enough of is compare it to the industry, but in the long-term, I don't see how this could be a bad move.

06-29-2005, 04:55 AM
KMB has been trading in a range for over a year and there is nothing to indicate it will do better than the market average. I donít see any reason to buy it.