Kimberly-Clark Corporation (NYSE: KMB), the renowned maker of essential products like Huggies, Kotex, and Kleenex, recently announced a dividend increase to $1.22 per share, up 3.4% from its previous payout.
This marks the 52nd consecutive year that the company has raised its dividend. Back in 2014, the stock was paying a quarterly dividend of $0.84; Kimberly-Clark has raised its payouts by 45% since then, averaging a compounded annual growth rate of 3.8% during that stretch.
While those aren’t terribly high rates of increases, Kimberly-Clark’s recent hike is in line with the average, suggesting that the current dividend growth rate may be a safe one for investors to rely on. Growing at high dividend growth rates may be unsustainable and with modest rate increases, there is potentially less volatility and risk for Kimberly-Clark investors in the long run.
The dividend increase comes as the company reported slightly underwhelming earnings numbers for the fourth quarter. Revenue of $4.97 billion was below analyst estimates of $4.99 billion and adjusted EPS of $1.51 was also below projections of $1.54. While those are misses, they aren’t huge ones for investors to worry about.
This is primarily a dividend stock; investors aren’t likely going to be buying Kimberly-Clark shares because they expect explosive growth in the near future. Over the past 10 years, the stock’s gains are a relatively mild 17%. But when you include the dividend, Kimberly-Clark’s 10-year total return is up over 60%.
If you’re a long-term investor who wants a safe dividend stock to own, Kimberly-Clark makes for a great option. You may not get a top growth stock, but you could lock in a safe and growing dividend.
