How Kimberly-Clark’s stock fared during the pandemic
The stock of staple foods for consumers has seen huge gains, as people stock up on toilet paper and other household needs.
Since March this year, the toilet paper race has started. As customers stocked basic needs products, such as toilet paper, tissues, diapers and others, supermarkets started to have empty shelves and Kimberly-Clark, the producer of these products, had its biggest sales increase in the past five years.
Although the demand for these products is decreasing and, as a result, sales have also decreased, the company’s stock price remains up 15% so far and this was due to consumer confidence in the company.
Owner of the Kleenex, Cottonelle, Huggies brands, among others, the company’s shares have had a 36% return in the last five years, making it a safe long-term investment.
Kimberly-Clark’s sales increased 8% over the previous year in the first quarter of the pandemic’s start, which is greater than the typical single-digit increase. This fact did not continue in the second half, when sales increased slightly compared to the previous year.
At the same time that it had a 12% increase in tissue sales to final consumers, the company also deals with the negative impacts and closing of companies of K-C professional.
The company was also able to move forward with its cost-saving restructuring plan and adjusted gross profit increased 16% in the second quarter. They increased their outlook for earnings per share for fiscal 2020 between 7% and 10%, to a range of $ 7.40 to $ 7.60.
Kimberly-Clark also has a dividend yield of 3.5% and has increased its dividends annually for the past 47 years, including across COVID-19, making it a great option for dividend investors.
