Procter & Gamble vs Kimberly-Clark: Which Is More Focused on Growth?

NEW YORK (TheStreet) -- Sometimes corporations take on low-margin business as a way of getting bigger, but that low-margin business can be a drag on shareholder return and a distraction for management.

In the case of consumer products giants Procter & Gamble (PG) and Kimberly-Clark (KMB) both  recently announced they are shedding less-productive business to focus on their core brands, the ones that made these companies household names.

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Which will reward you as a shareholder once they've finished shedding those businesses? Using my criteria for dividend investing, it's a dead heat. Both businesses make excellent investments for long-term oriented shareholders seeking rising income.

Brands and Focus

Procter & Gamble, with a market cap of $225 billion, has 23 brands that do over $1 billion in sales, including Always, Bounty, Braun, Charmin, Crest, Dawn, Duracell, Gelette, Olay, Oral-B, Pampers, Pringles, and Tide. Its shares, at around $83, are up 1.7% for the year to date.

Kimberly-Clark, with a market cap of about $40 billion, has five brands that sell over $1 billion per year in sales: Huggies, Kleenex, Kotex, Pull Ups, and Scotts. At $108, its shares are up 3.5% for the year to date.

Procter & Gamble said earlier this month it is going to shed up to 100 brands but so far has not announced which brands they are. However, it is very unlikely it will be any of those bringing the company $1 billion or more a year in sales. PG can stand to benefit from jettisoning its line of Febreeze Candles, for instance, without destroying value.

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