Kimberly Clark Corp (KMB): The Procter & Gamble Company (PG) Is Betting On Pampers To Pump Up Profits

Kimberly Clark Corp (NYSE:KMB)’s dividend is a hefty $3.24 per share. It has a relatively low payout ratio (66%) and plenty of free cash flow, so increases are likely to continue. The company has a 41-year streak of increases. It is a stock that you should consider.

Note that Procter & Gamble pays $2.41 a share. It has a similar payout ratio of 59%, and because of initiatives such as the Pampers and Tide innovations, free cash flow growth should be sufficient enough going forward to keep up the dividend increases. The company has a enviable record of 56 years in a row where the payout is increased.

Conclusion
Innovation is just as important in the consumer goods sector as it is in technology.

Procter & Gamble uses it to increase shareholder value and promote growth. It is betting on higher profit from an innovation in Pampers. A new product in the laundry detergent market, Tide Pods, has allowed the company to increase sales in the high end there.

Rival Kimberly Clark Corp (NYSE:KMB) will use social media to increase revenue for its lineup of products.

Both stocks appear poised for future revenue and earnings growth because of their forward-looking policies.

Both stocks can be part of an income producing portfolio as well, since they have a solid record of increasing dividends; Procter & Gamble is on a 56-year streak, and Kimberly Clark Corp (NYSE:KMB) isn’t far behind at 41 years. Both companies also have free cash flow and payout ratio’s that will allow future increases.

The article P&G Is Betting On Pampers To Pump Up Profits originally appeared on Fool.com and is written by Mark Morelli.

Mark Morelli owns shares of Procter & Gamble. The Motley Fool recommends Kimberly-Clark, and Procter & Gamble. 

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