There is no doubt that the economy is in a state of flux. The first half of 2022 saw the stock markets plunge and inflation surge (though we’re starting to see signs of relief on both fronts). Not only that, there are murmurs of a looming recession. So, should we be afraid of investing?
The answer to that question depends on your financial situation and investment goals. If you are already comfortable with the amount of risk you take with your current investments, it may be best to stay the course.
If you have cash sitting on the sidelines and are looking to put it to work, consider companies that have durable competitive advantages, are leaders in their marketplace and are committed to returning value to shareholders. The following two companies satisfy all three attributes.
Kimberly-Clark Corporation (KMB)
Kimberly-Clark is a multinational megacorporation that produces and sells paper-based personal care products such as disposable diapers, a variety of wipes, feminine hygiene products, and surgical and medical equipment.
The company was founded in 1872 and operates in over 175 countries. Its name is attached to many well-known brands, including Andrex, Cottonelle, Depend, Huggies, Kleenex, Plenitude, etc., and it claims that over ¼ of the world's population uses its products every day. It also has over 46,000 active employees.
Kimberly-Clark’s operations are divided into three sections:
The personal care segment: consists of brands like Huggies, Kotex, Depend, and Poise.
The consumer tissue segment: consists of famous brands like Kleenex, Scott, and Viva.
K-C Professional segment: is associated with KleenGuard, Kimtech, Wypall, etc. brands and helps to create a safe and healthy workplace.
The company currently pays an annual dividend of $4.64 per share or a respectable yield of 3.53% based on the last closing price. Dividend growth investors will appreciate that Kimberly-Clark has increased its dividend for 51 consecutive years starting in 1971, placing the company on the elite list of Dividend Kings.
That said, its payout ratio is a tad high at 79.51%. So, investors will want to pay attention to how the company will grow its EPS in future quarters.
On April 22, 2022, Kimberly-Clark announced its earnings for the first quarter of 2022. KMB’s revenue for the first quarter of 2022 was $5.1 billion, up 7% from the previous year. The company is expected to report second-quarter earnings results on July 26, 2022.
Ratings
To see what the analysts are doing, click “Analyst ratings” on the sidebar on the left. By doing so, you’ll see that analysts currently have a consensus hold rating for this company. You can also review the companies’ earnings estimates for the upcoming quarter.
The Procter & Gamble Company (PG)
The Procter & Gamble Company (PG) is a diversified American multinational consumer goods company that offers a variety of products for personal hygiene and health. The company was founded in 1837, and today it is headquartered in Cincinnati, Ohio, with over 101,000 active employees.
PG operates through five industry-based sectors:
The baby, feminine, and family care segment: Provides baby wipes, diapers, paper towels, tissues, toilet paper, and feminine care items.
The beauty segment: Offers items for skin care and hair care.
The health care segment: Sells instant diagnostics, vitamins, minerals, and other personal health care items, as well as dental and oral care items.
The grooming segment: Markets a variety of shave care products such as female and male blades and razors, as well as products used before and after shaving.
The fabric and home care segment: markets air care, dish care, fabric enhancers, laundry additives, and detergents.
Procter & Gamble's revenue for the most recent fiscal quarter ending March 31, 2022, was $19.381 billion, up 7.02% year on year. The company’s reported earnings per share (EPS) came in at $1.33, an increase of 5.56% year-over-year, and the trailing twelve months’ EPS was $5.74, a 5.71% increase from the prior year.
The company is expected to release its next earnings results on July 29, 2022. P&G’s most recent closing price was $143.02 as of July 22, 2022. Analysts expect P&G to report quarterly earnings of $1.24 per share, representing a YOY increase of 9.7%.
Proctor & Gamble declared its quarterly dividend of $0.913 per share, payable on August 15, 2022, representing a 2.6% yield at its last close. The company has continuously increased its dividend yearly since 1956 (66 consecutive years), earning them a place on the coveted Dividend Kings list.
Final Thoughts
When the economy takes a downturn, it’s natural to have mixed emotions. Investors often worry their investments will lose value or that they won't have anything left. However, it doesn’t have to be that way. Investors can still own stocks during a recession, and some may even thrive!
Both Kimberly-Clark and P&G produce the goods that consumers need and use daily. But, it also doesn’t have to end there. They have a history of providing shareholder value, healthy balance sheets, and past ability to navigate through recessions.
More Stock Market News from Barchart
/Semiconductor%20by%20Gorodenkoff%20via%20Shutterstock.jpg)
/An%20image%20of%20a%20Tesla%20humanoid%20robot%20in%20front%20of%20the%20company%20logo%20Around%20the%20World%20Photos%20via%20Shutterstock.jpg)
