Kimbery-Clark (KMB) - Brands You Can Take to the Bank

If there has been one lesson for investors during this recession, it has to be the value of investing in companies with easily recognizable global brands. One company which fits this bill is Kimberly-Clark (KMB).

Operating in 35 different countries and represented by 56,000 employees, the company owns some of the world’s strongest family and personal care consumer brands including Kleenex, Scott, Andrex, Huggies, Pull-Ups, Kotex and Poise.

Apart from becoming a dominant player in the markets in which it operates, Kimberly-Clark (KMB) has also established itself as a firm favorite with investors. The company offers a dividend yield of around 4% and has raised its dividend every year since 1980.

Results for the second-quarter saw profit rise 24% to $498 million, or $1.20 a share, from $403 million, or 97 cents a share, in the year-earlier period. Sales at the maker of Kleenex and Huggies diapers increased to $4.86 billion from $4.73 billion. The company said it still expects to report adjusted earnings of $4.80 to $5 a share for the full year, though profit will likely come in closer to the low end of the range. Kimberly-Clark (KMB) also said that it now sees net sales increasing 3% to 5% in 2010 versus previous expectations of 4% to 6%.

The prior quarter saw diluted net income per share for the quarter was $0.92 and adjusted earnings per share were $1.14 compared with diluted net income per share of $0.98 in 2009 while free cash flow came in at $464 million.

The company was upbeat about the recovery in earnings and most of the economies in which it operates, saying "We are off to a solid start to the year. Organic sales rose 2 percent, and we delivered strong improvements in gross margin and adjusted earnings per share, including excellent contributions from our ongoing cost savings program and last year's organization optimization initiative. In addition, we strengthened our brands by launching a number of innovations in the first quarter and by significantly increasing strategic marketing spending. Our targeted growth initiatives, particularly in our K-C International business and in Health Care, continued to progress well. Finally, we continued to deploy cash flow in shareholder-friendly ways, including raising our dividend by 10 percent and resuming our share repurchase plan. All-in-all, we are off to a good start to 2010."

There are few companies in the world who can claim that every day 1.3 billion people make use of their products across the globe. Kimberly-Clark (KMB) is one who can make such a claim and with their track record of returning free cash to shareholders, investors may well consider this as a stock to provide long-term rewards.