Tissue and paper towel maker Kimberly-Clark ( KMB) owns more than a few household name brands itself, including Kleenex, Scott and Huggies. The firm is one of the biggest names in consumer health and hygiene products, selling the consumable items that consumers need to keep stocked-up in their homes. Unfortunately for KMB, when times get tough consumers tend to stock up the off-brand competitors. That means that Kleenex tissues often get traded down for store brand tissues, a product that consumers are more willing to switch to due to comparatively small differences between the two. KMB has been working to combat that poor stickiness by offering more differentiation between its offerings and the bargain brands. That's helped plug the holes in its sales, but ultimately, lower input costs are the critical factor that's been giving Kimberly-Clark breathing room on its income statement in 2012. With net margins pushing back up towards double-digits again, this stock is throwing off mountains of cash and a hefty dividend payout that currently yields 3.6%. In turn, hedge funds ramped up their holdings of KMB by 25% in the second quarter, picking up 1.11 million shares of the firm. Like most of the names that made this list, Kimberly-Clark is a defensive income-paying stock that's a solid core holding for investors in this market. To see these stocks in action, check out the at Hedge Funds' Favorite Consumer Stocks Q2 portfolio on Stockpickr.