Kimberly-Clark Corporation Stock Buy Recommendation Reiterated (KMB)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK ( TheStreet) -- Kimberly-Clark Corporation (NYSE: KMB) has been reiterated by TheStreet Ratings as a buy with a ratings score of A- . The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

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Highlights from the ratings report include:
  • KMB's revenue growth has slightly outpaced the industry average of 1.4%. Since the same quarter one year prior, revenues slightly increased by 2.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has significantly increased by 116.44% to $1,119.00 million when compared to the same quarter last year. In addition, KIMBERLY-CLARK CORP has also vastly surpassed the industry average cash flow growth rate of 15.55%.
  • 38.30% is the gross profit margin for KIMBERLY-CLARK CORP which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, KMB's net profit margin of 5.03% significantly trails the industry average.
  • Compared to its closing price of one year ago, KMB's share price has jumped by 26.81%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • KIMBERLY-CLARK CORP's earnings per share declined by 32.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, KIMBERLY-CLARK CORP increased its bottom line by earning $4.42 versus $3.99 in the prior year. This year, the market expects an improvement in earnings ($5.60 versus $4.42).

Kimberly-Clark Corporation, together with its subsidiaries, engages in manufacturing and marketing health care products worldwide. The company operates in four segments: Personal Care, Consumer Tissue, K-C Professional and Other, and Health Care. Kimberly-Clark has a market cap of $35.6 billion and is part of the consumer goods sector and consumer non-durables industry. The company has a P/E ratio of 17.3, below the S&P 500 P/E ratio of 17.7. Shares are up 7.8% year to date as of the close of trading on Friday.

You can view the full Kimberly-Clark Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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