Dividend King Kimberly-Clark Is a Good Buy in 2025

Dividend Kings, like Kimberly-Clark (NYSE: KMB), are generally good stocks to buy and hold because their visible cash flows sustain reliable dividends and regular distribution growth. Those qualities, along with their healthy balance sheets and, oftentimes, share repurchases, provide ever-increasing shareholder value reflected in their stock prices.

Kimberly-Clark’s share price experiences downswings, which are followed by larger upswings, putting it in a sustained and sustainable uptrend. 

The takeaway for investors is that the KMB stock price declined in Q2 2025, as part of an extended consolidation following the pandemic bubble and market normalization. It is setting up the next upswing, and may never offer such a low price again. 

Kimberly-Clark Quietly Generating Cash Flow With Personal Care Products

Kimberly-Clark is well-positioned as a leader in an industry similar to dentistry and barbering; everyone needs personal care products regularly. Its business is well-established and diversified across product categories, focusing on a good-better-best assortment, providing solid cash flows. It is not immune to economic swings but is insulated from them. 

Revenue in Q1 fell 6% to $4.8 billion, narrowly missing the consensus reported by MarketBeat. However, much of the decline is due to divestiture and business exits that left the organic business in better shape. Organically, the company contracted by only 1.6%, with most of the loss due to pricing; volume and mix were flat year-over-year and are expected to remain resilient as the year progresses. 

Margin was also resilient, with increased costs offset by efficiency efforts linked to the Powering Care strategy. Adjusted gross margin contracted by 20 bps and operating margin by more but less than forecasted by analysts, and offset by share repurchases.

The net result is that earnings declined by only 4%, compared to a 6% top-line contraction, and additional cost savings are expected this year. 

The only bad news is the guidance, but factors outside its control impact it. The company reduced its operating profit and adjusted EPS and FCF guidance for 2025 due to increased cost expectations, stating it can regain margin over time.

The critical detail is that earnings are forecasted to be flat compared to the previous year, sufficient to sustain financial health and capital returns. Free cash flow is also expected to be ample, at nearly $2 billion. 

Kimberly-Clark Takes Care of Its Investors With Capital Returns

Kimberly-Clark’s capital return is significant, with share repurchases reducing the count by 1.5% in Q1 and the dividend yield more than double the amount. The dividend yields more than 3.5% in late April and can be expected to grow at a modest single-digit pace annually. The balance sheet reflects the impact of the divestiture and wind-down, with the net result showing reduced assets offset by reduced liabilities and increasing equity, up 25% year-over-year.

Kimberly-Clark investors include a significant number of analysts and institutions. MarketBeat tracks 14 analysts rating the stock, with a consensus of Hold, and institutions own approximately 75% of the stock.

Analysts' trends in 2025 include steady coverage, firming sentiment, and an increasing consensus target that forecasts about 5% upside this year. Activity immediately after the release is a single price target increase from BNP Paribas to align with the consensus. 

Kimberly-Clark: Range-Bound Trading to Give Way to Uptrend

Kimberly-Clark’s price action is still technically range-bound in 2025, but there are signs the long-term uptrend is regaining traction. Subsequent bounces in 2022, 2024, and again in early 2025 show support rising in alignment with the 30-month EMA and now sitting at the shorter-term 150-day and 30-day EMAs.

With this in play, a retest of the all-time high is likely, and a new high could be reached by the end of the year. 

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The article "Dividend King Kimberly-Clark Is a Good Buy in 2025" first appeared on MarketBeat.