![]() ![]() So while KMB's payout ratio has been progressively deteriorating, it doesn't mean anything. You can't pay a dividend or anything else with net income it's just a metric. The reason is because dividends represent a cash outflow, and assessing a company's ability to service cash outflow by comparing it to a non-cash accounting metric makes no sense. But alas, the payout ratio shouldn't scare you off - it's useless. Investors that use the payout ratio - of which these two metrics are the components - would likely become disconcerted at this information on the thought that KMB's dividend is quickly becoming something the company cannot afford. The obvious observation here is that the payout that we just saw has been steadily climbing is catching up to the net income that hasn't moved for a decade, and that's also not a desirable situation. That's not good, because ideally, you want companies you own to be growing earnings - but to KMB's credit, at least it isn't showing declining profits. ![]() We can see that KMB's net income basically hasn't moved for the past decade. Now, how does KMB afford to continue to raise the payout? This chart shows net income against the cost of dividend. Even though there is no real pattern, we can at least get a feel for what the company has done in the past. And it isn't as though the increases get progressively smaller as time goes on they're just everywhere. We can see that KMB's increases are really all over the place, ranging between 3% and 10% in the past decade. Here's a look at the size of the respective dividend increases for the same time period to get a feel for how quickly the payout has increased. No one who is even slightly familiar with KMB should be surprised by this. We can see a payout that was below $2 in 2005 has risen to more than $3.50 as of 2015, as the dividend has been raised every year in moderate amounts, producing very solid income for shareholders. We'll begin with KMB's per share payout for the past decade and the indicated payout for 2015. I'll be using data from Morningstar to achieve this. But what if you're one of those dividend investors that doesn't care about the price? What if all that matters is that the dividend is safe and will continue to grow? There are many investors like that who just want the payout, and in light of that, I'll take a look at some data for KMB to assess the dividend's safety and the ability of the company to continue to raise it. I've said that about many income stocks in recent months, as the class as a whole has been bought so aggressively that many income favorites are out of my comfort zone. "Hey do guys want to go to a party Friday?", Xzeak blurted.Recently, I was somewhat critical of consumer staples firm Kimberly-Clark's ( NYSE: KMB) valuation, as I think the stock is being buoyed by low interest rates. They always have my back, they always have since I was little. "Like hell I'll let her", Vivian said forming a fist in her hand. Something tells me she is gonna make my life a living hell". I love Layla but sometimes the girl just takes it a little too far. "No way! Did they hurt you? If they did just give me the signal Sha and I'll make it so they can never fuck again", Layla shouted. "Well guess who i ran into today?", I chuckled. So how is everybody else's morning", I said trying to change the subject.Įverybody was either saying ok or i'm not really sure. "Or lies", Briana huffed under her breath. ![]() "We hate it when you do that", Vivian sneered. Im not that good looking", I plainly stated.īut right when I said it everybody stopped and glared at me. "Yeah ok, now you guys are over exaggerating. "And simply because he could", Layla said nudging my shoulder. "Your big boobs for another thing", Briana simply stated. "You got a lovely ass", Zach replied wiggling his eyebrows. "Oh he had a reason", Sarah and Macy said in unison wiggling their eyebrows. "What? He touched my butt for no reason", I said crossing my arms. I sat next to a red faced Layla still laughing at how I tripped the kid. I just kept walking while everybody laughed at him. Its kind of a reflex thing when someone scares or touches me like that. And in that split second I tripped the kid who did it. Not a second later somebody slapped my butt. You know that whistle guys make when checking out a girl, yeah that one. As I walked toward them somebody whistled. Not only them but our other friends Sarah, Macy, Xzeak, Zack, Alex, and Brian. A PICTURE OF BRIANA AND A SONG DOWN BELOW ~ :DDDDDDDDDDD P.S- XZEAK IS PRONOUNCED LIKE SAYING ZEAK IT'S JUST THAT THE X IN HIS NAME IS SILENT IT'S WEIRD BUT COOL :DĪs I walked through the cafeteria I finally found Bri, Layla, and Vivian. ![]()
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