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Thursday, November 19, 2015

Recent Transfer: Kimberly-Clark Corporation

Kimberly-Clark Corporation (NYSE:KMBis engaged in the manufacturing and marketing of a range of products made from natural and synthetic fibers using advanced technologies in fibers, non-wovens and absorbency. Key brands include Huggies, Kleenex, Scott, Cottonelle, WypAll, Kimberly-Clark and On-Q. The company was founded in 1872 and is headquartered in Dallas, Texas.

I'm in the process of transferring stocks in my portfolio at Scottrade to DivGro. So far, I've transferred Coca Cola (NYSE:KO) and Proctor & Gamble (NYSE:PG). In each of these transfer posts I'm providing details of past transactions and I'm explaining why I'm a shareholder. Later, I'll be doing a thorough analysis on each stock.

I own 28 shares of KMB which I bought in 3 batches averaging of $90.55 per share. Average yield on cost (YoC) is 3.49%. With this transfer, DivGro's projected annual dividend income increases by $98.56 and I'm adding $217.92 of past dividend income. 

KMB pays quarterly dividends of 88¢ per share, or $3.52 annualized. Given a per share price of $120.94, the stock currently yields 2.91%.

2012-06-07 Bought: 20 shares of KMB at $80.66 per share: $ 1,613.15
2012-10-02 Dividend on 20 shares at 74¢ per share:  $ 14.80
2013-01-03 Dividend on 20 shares at 74¢ per share:  $ 14.80
2013-04-02 Dividend on 20 shares at 81¢ per share:  $ 16.20
2013-07-02 Dividend on 20 shares at 81¢ per share:  $ 16.20
2013-10-02 Dividend on 20 shares at 81¢ per share:  $ 16.20
2014-01-03 Dividend on 20 shares at 81¢ per share:  $ 16.20
2014-04-02 Dividend on 20 shares at 84¢ per share:  $ 16.80
2014-07-02 Dividend on 20 shares at 84¢ per share:  $ 16.80
2014-10-02 Dividend on 20 shares at 84¢ per share:  $ 16.80
2015-01-03 Dividend on 20 shares at 84¢ per share:  $ 16.80
2015-04-02 Dividend on 20 shares at 88¢ per share:  $ 17.60
2015-07-02 Dividend on 20 shares at 88¢ per share:  $ 17.60
2015-07-07 Bought: 4 shares of PG at $111.48 per share: $ 445.92
2015-10-02 Dividend on 24 shares at 88¢ per share:  $ 21.12
2015-11-16 Bought: 4 shares of PG at $119.07 per share: $ 476.28
 Total Capital Invested $ 2,535.35

Total Dividends Received:$ 217.92

I routinely include commissions to show true cost basis. Scottrade charges $7 commission per trade, so when I buy relatively few shares the average share price gets somewhat inflated. If commissions are excluded, the average share price for my KMB buys are $80.31, $109.73, and $117.32.

The buys are indicated in the following chart. Notice that I added 4 shares on Monday in order to get total capital invested to about $2,500, which is the usual size of my DivGro buys.

Source: Scottrade

I'm quite happy with my investment in KMB. The stock is trading about $30 per share above my average buy price, which represents a simple return of about 33%. Taking dividends into account, total return is 42.16% or about 19% annualized.

KMB has returned 8.6% of my original investment in the form of dividends.

Why KMB?

KMB is a member of The Blogger's Dividend Growth Portfolio, a portfolio I compiled last year containing the 52 most popular dividend growth stocks trading on U.S. exchanges, based on the publicly available portfolios of bloggers in my blogroll.

Here are some reasons I like KMB and why I decided to transfer the shares to DivGro:
  1. KMB is a Dividend Champion and a member of the S&P 500 Dividend Aristocrats
  2. The company has a stellar track record of 43 consecutive years of dividend increases. 
  3. KMB yields about 2.9% and has a 5-year dividend growth rate of 7.4% annually. 
  4. KMB has worldwide reach with products being sold in more than 170 countries. 
  5. Five of KMB's brands each generate at least $1 billion in sales annually!
Do you own shares of KMB? It seems like the stock is trading above fair value – do you agree? Please share your ideas about KMB in the comments section.


  1. Nice write up on KMB. I can think of few things that are more immune to creative destruction than the products KMB sells.

    1. Thanks Ben! I like KMB's dividend yield and growth rate and the company's seemingly stable business environment. It does seem, though, that the stock is trading above fair value.

  2. Replies
    1. KMB is a good dividend growth stock. Hope you'll decide to become a shareholder in the future!


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