Consumer stocks are now as risky as they've ever been.
Unemployment's historically high,
consumers are spooked, and subpar earnings abound, as
companies pay the price for lost competitive advantage or
fiscal irresponsibility. But tough times can offer investors
the best chance to buy stocks.Â
Even if stock prices are low, investors still need to be
careful. Many companies simply won't survive the recession in
their current form. However, thinning the herd of weaker
competitors should lead to big winners in the consumer space
when the economy recovers. I've already
highlighted
two reasons to sellconsumer-staples company
Kimberly-Clark (NYSE: KMB). Here,
I've listed two reasons to pull the "buy" trigger on this
personal- and health-care company.
1. Showing shareholders the money
Manufacturer and marketer of well-known brands such as
Kleenex, Kotex, Huggies, and Depends, Kimberly-Clark is one
of the larger and better-known consumer-staples companies.
Among other qualities,
this sector often attracts investorswith its substantial
dividend yields, made possible by relatively stable cash
flows, and in the case of more mature companies, modest
capital expenditure requirements.
And compared to peers that compete in similar categories,
Kimberly-Clark is clearly a dividend overachiever. Just take
a gander at the table below.
Company
Market Cap
Dividend Yield
Payout Ratio
Kimberly-Clark
$24.6 B
4.1%
59.1%
Procter & Gamble (NYSE: PG)
$167.1 B
3.1%
37.5%
Colgate-Palmolive (NYSE: CL)
$39.3 B
2.2%
42.1%
Church & Dwight (NYSE: CHD)
$4.0 B
1.0%
11.7%
Johnson & Johnson (NYSE: JNJ) Continued... |