Share-price gains and declines among
are usually smaller than they are among sizzling growth
) offers a good example of why dividend investors sometimes need
to adjust their expectations.
Three of Kimberly-Clark's past five breakouts led to gains of
less than 7% before a new consolidation began. The other two
offered 18% to 20% pops.
On the downside, the lows involved pullbacks of 4% to 14%.
What does this tell investors?
One lesson investors might draw is to alter their buying
strategy for dividend stocks. An entry at the 50-day line might
make more sense than waiting for the stock to clear the
Because price gains are routinely modest for dividend stocks,
finding an early entry can make a difference in how easy or hard
it is to hold the stock. And most people buy dividend stocks with
the idea of holding the stock.
Kimberly-Clark is finding support at its 50-day line. Granted,
the stock needs a small gain to clear the flat base buy point of
113.19. But in October, the last time Kimberly-Clark cleared a
buy point, the ensuing gain was less than 5% before the stock
To hold such a stock, investors need every edge they can get.
The 50-day line might provide that edge.
Kimberly-Clark jacked up its quarterly dividend from 81 cents
a share to 84 cents a share in Q1. The annualized yield is 3% vs.
1.86% for the S&P 500.
Earnings were flat vs. the year-ago quarter. Revenue fell 1%
-- hurt by currency effects. Europe was the chief problem; sales
dropped 10.5% vs. the year-ago period.
In October 2012, Kimberly unveiled plans to exit most of the
diaper business in Europe and shed lower-margin businesses.
Restructuring costs will impact results through 2014.
The company also plans to spin off its health care business in
Q3 or Q4.