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Are Kimberly-Clark and Procter & Gamble Worth Buying Now?

Procter & Gamble's share price also may have peaked for now, even though the company intends to win the competition for the best diaper in the business. Its Pampers brand still lags Kimberly-Clark's Huggies in the North American diaper sales derby by about 8%.

P&G steps into the earnings confessional on Wednesday, April 23, before the market opens. If first-quarter earnings per share exceed $1.02, that should be a positive for the stock, but I expect revenue to be flat compared to the year-ago quarter. After a precipitous sell-off at the beginning of 2014, the share price of P&G recovered.

PG Chart

PG data by YCharts

The company maintained a robust 19% trailing 12-month operating margin, 3% higher than Kimberly-Clark. P&G's current $2.57 annual dividend yields 3.17% for investors who buy at $81 a share. The company's nearly $9 billion levered free cash flow should help maintain this attractive yield, although the payout ratio is a high 64%.

If you don't already own shares, you may want to buy after P&G reports. Don't be surprised if shares correct below $80 and test the March 21 low of $77.88 between now and the next quarterly report in July.

At the time of publication, the author had a position in PG but no position in any of the other stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.


Marc Courtenay is the founder and owner of Advanced Investor Technologies, LLC, as well as the publisher and editor of
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