Showing posts with label $KMB. Show all posts
Showing posts with label $KMB. Show all posts

Tuesday, March 15, 2011

Income Investors in a down market

Investors never like to open their brokerage account and see losses
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Monday, February 14, 2011

Dividend Machine Kimberly Clark

Kimberly Clark, symbol KMB, is a dividend machine that every income investor should consider as an investment dedicated to cash flow. KMB is number thirteen of fifty-two dividend machines I will profile over one year.

Three investments for income

As you know, three investments are the sources of our cash flow; dividend machines, bond interest and covered calls.   KMB's role is as a dividend machine. Income investors may want to consider buying KMB debt to receive interest income from a solid company and I would too, but KMB issues almost no debt.   Moreover, it is very rare to find a call option with enough income to risk losing KMB's income potential.

Select a company with a solid balance sheet

One of an income investor's goal is to select a solid company with a good balance sheet and KMB fits that bill. KMB's debt to equity (D/E) ratio at the end of 2010 was a mere .90 this is a good company for income investors. 

Select a Company that increases dividends

Income investors also like to select investments that have a long history of increasing the dividend income to the shareholders. After all, we invest in companies that pay us, not in companies that are solid but do not pay income. Growth investments are not the investments for the portion of our investment portfolio dedicated to investment income. Growth is icing on the cake for income investors. We certainly do not want to invest in a company that pays a dividend but is in a dying industry so careful research is necessary.

Pick one company per week

I hope to provide you with a bit of a short cut in your income investment research by profiling one company every week that you may want to include as part of your cash flow strategy.

KMB Dividend Machine Fundamentals

Let us look more carefully at Kimberly Clark.    KMB is a personal care, health and hygiene company. You know of and use many of KMB's products. Kimberly earns $4.45 per share and the income to investors is $2.80 per share.  The annualized dividend yield is 4.8% based on the closing price of $65.06.

If you own KMB before March 2, 2011, you will receive a quarterly dividend of $.70. KMB's income growth to you, the income investor, has been almost 8 percent per year. 

Through thick and thin, KMB provides the income investor with ever-increasing dividends. In addition, you invest in a solid company with global sales. 

Very Truly Yours,

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Tuesday, December 7, 2010

Dividend Machines and Diversification

Diversification is one of the most important aspects of investing.

I try to profile companies that meet all our criteria as a dividend machine and also provide diversification. Never own just one company. One hundred companies are too many to own. Know your companies, what they do as well as their fundamentals.

Diversification is not just measured by how much cash you have versus the percent invested in bonds and stocks. Diversification can be measured in many ways. Let's look at the companies I have profiled over the last 4 weeks as an illustration of how to diversify with dividend machines.

11/14/2010 – MCHP Microchip Technology a smaller electronics company that makes microprocessors and receives about three quarters of its income from outside the U.S.

11/21/2010 – JNJ Johnson & Johnson a very large multinational company that is a big pharma, biotech, and band aid company. You get a lot of diversification in just one company.

11/28/2010 – GPC Genuine Auto Parts is both a producer of auto parts and a retailer with most of its business in the United States.

12/06/2010 – KMB Kimberly Clark a very large multinational company concentrating on consumer staples like tissue and diapers with sales in both the U.S. and abroad.

Look for companies that meet our criteria and that also provide diversification and sit back and watch your income grow.

Very Truly Yours,

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