COMPANY DESCRIPTION

Kimberly-Clark manufactures and markets products primarily made from natural or synthetic fibers. Co. has four operating segments: Personal Care, which provides disposable diapers, training and youth pants, swimpants, baby wipes, feminine and incontinence care products, and other products; Consumer Tissue, which provides facial and bathroom tissue, paper towels, napkins and related products; K-C Professional, which provides products such as apparel, wipers, soaps, sanitizers, tissues and towels; and Health Care, which provides surgical and infection prevention products for the operating room, and a portfolio of medical devices focused on pain management, respiratory and digestive health. Some key Kimberly-Clark's brands are Kleenex, Scott, Huggies, Pull-Ups, Kotex and Depend among others.The company's strong portfolio of daily use brands sold across 175 countries is helping it to retain a market leading position. 

 

ECONOMIC MOAT

In our opinion Kimberly Clark’s moat is dug by a branded portfolio of market leading products which include diapers, feminine-care products, and facial tissues.  Huggies, Scott, Kleenex, Cottonelle, and Kotex are all $1 billion brands.  Globally diverse supply chain selling its products in more than 170 countries.

 

OUTLOOK

Kimberly Clark struggled in 2014. Much of the struggles was due to difficulties in Venezuela. Volatile commodity pricing and currency fluctuations will likely continue to pressure operations in the coming months. Product innovation, a stronger advertising and marketing campaign, and geographic diversification will lead to healthy long-term growth. Kimberly-Clark is rewarding its shareholders. The board of directors recently hiked the quarterly dividend 5%, to $0.88 a share. Too, Kimberly plans to repurchase between $800 million and $1 billion of its common stock this year.  KMB’s attractive dividend yield boost its conservative appeal.