20 Worst Dividend Aristocrat Stocks According to Analysts

8. Kimberly-Clark Corporation (NYSE:KMB)

Average Analyst Rating Score: 3.6

Kimberly-Clark Corporation (NYSE:KMB) is a Texas-based consumer goods company that offers a wide range of related products to its consumers. The company offers a quarterly dividend of $1.22 per share and has a dividend yield of 3.50%, as of June 14. It has been growing its dividends consistently for the past 52 years. It is among the worst dividend aristocrat stocks according to analysts.

Major consumer goods companies have raised their prices since the pandemic to offset rising costs, which are now beginning to stabilize from their highest levels. This has resulted in heightened competition from budget-friendly brands as consumers prioritize value for money. Kimberly-Clark Corporation (NYSE:KMB) reached its high in August 2020 when it was trading at around $158 per share. The stock hasn’t been able to achieve this share price since then, in fact, it has declined by nearly 12% within this timeframe. In the first quarter of 2024, the company reported a 1% decline in its revenue from the same period last year at $5.15 billion. The company reported a slight growth of 1% in volumes.

Kimberly-Clark Corporation (NYSE:KMB) impressed investors with its first-quarter earnings, however, the company’s fundamentals remain in question. Though the company’s dividend growth streak is impressive, it is important to note that it is paying out more in dividends than it earned. Its 5-year average payout ratio comes in at 76.35%, a level not recommended by analysts. Moreover, the company’s debt position is also not up to par. It has approximately $8 billion in debt as of the most recent quarter and its debt-to-equity ratio of 6.75 is very high. This level of debt can be risky as it implies significant leverage.

As of the close of Q1 2024, 36 hedge funds tracked by Insider Monkey reported having stakes in Kimberly-Clark Corporation (NYSE:KMB), which remained unchanged from the previous quarter. These stakes are collectively valued at nearly $1 billion. With over 1.5 million shares, AQR Capital Management was the company’s leading stakeholder in Q1.