Kimberly-Clark Could Benefit From A Baby Boom

NYSE: KMB | Kimberly-Clark Corporation  News, Ratings, and Charts

KMB – Kimberly Clark (KMB) has been an outperformer as people staying at home has resulted in increased spending on household items. There are expectations that the birth rate could skyrocket in the coming years which should benefit KMB as well.

  • Are we going to see a post-pandemic baby boom?

  • The diaper business could be a growth industry

  • Kimberly-Clark (KMB) is a leader

  •  A boom could turbocharge impressive earnings and steady revenues

  • A juicy dividend and bullish trend make KMB a growth stock

The US economy is now emerging from the most challenging period in most of our lifetimes. One year ago, the number of COVID-19 cases was rising along with fatalities from the pandemic. The most recent data shows that nearly 10% of the US population caught the virus, with over 571,000 dying from the coronavirus. As of this week, roughly one-third of the US has received the Pfizer (PFE) or Moderna (MRNA) two-jab vaccines or the Johnson and Johnson (JNJ) one-and-done shot. Herd immunity is on the horizon. The Federal Reserve is projecting 6.5% GDP growth in 2021, with some economists forecasting even higher economic expansion levels. At the end of last week, the jobs report showed that unemployment dropped to 6%, with the highest number of new jobs since August 2020.

The economy is emerging from the pandemic, and life is getting back to normal. Optimism is growing, and that sets the stage for future planning. After a dark period, many more Americans may be starting families. A baby boom could be starting in the US.

Kimberly-Clark Corporation (KMB) is a company that will benefit from an increasing birth rate. KMB shares could emerge from the pandemic as a growth stock.

Are we going to see a post-pandemic baby boom?

In the post-pandemic era, life is getting back to normal. Many couples are now focusing on the future as vaccines create herd immunity to the worst virus to attack the world since the 1918 Spanish flu.

In 2018, the US birth rate declined by 0.95% from 2017. In 2019, it rose by 0.09%, and in 2020, it increased by the same percentage. In 2021, we could see an increase as life returns to normal. Meanwhile, the global population continues to grow by around eighty million people each quarter despite the tragic loss of like to COVID-19, which claimed 2.9 million lives worldwide. As of the end of last week, over 7.754 billion people inhabit our planet.

We could see a baby boom over the coming months and years as optimism prompts couples to start or expand their families. At the same time, the average life expectancy in the US has increased over the past decades. In 1960, it was around 70 years; in 2021, it was just above 78.5 years in the US.

The diaper business could be a growth industry

Diapers are essential at the beginning and end of life. The diaper business reflects the birth rate as well as the life expectancy. More births and longer lives increase the demand for diapers and other products.

The global diaper market grew by more than 6% from 2014-2019, and forecasts are for growth to an over $98 billion business by the end of 2025.

Kimberly-Clark (KMB) is a leader

Kimberly-Clark (KMB) and its subsidiaries manufacturers and market personal care and consumer tissue products worldwide. The personal care segment provides disposable diapers, training and youth pants, baby wipes, and other products. KMB’s many brands include Huggies, Pull-Ups, Little Swimmers, GoodNites, DryNites, Depend, Poise, and many others.

KMB had a market cap of roughly $46.7 billion at the end of last week. The shares trade an average of over 2.4 million per day.

A boom could turbocharge impressive earnings and steady revenues

KMB is a highly profitable company that has beat analyst earnings forecasts in three of the past four consecutive quarters.

Source: Yahoo Finance

KMB has earned steady profits. Analysts expect EPS of $1.94 per share when the company reported Q1 earnings on April 23, 2021.

Source: Yahoo Finance

The chart illustrates steady and impressive revenues from 2017 through 2020. Earnings have been trending higher from 2018 through 2020.

A juicy dividend and bullish trend make KMB a growth stock

KMB pays shareholders a $4.56 dividend, translating to 3.32% at $137.16 per share. KMB is a leader in the diaper business for young and old alike. A survey of fourteen analysts on Yahoo Finance has an average price target of $146.34 for KMB shares, with forecasts ranging from $122 to $172.

Source: Barchart

The chart shows that KMB shares have been trending higher, making higher lows and higher highs since 1987. The most recent peak came in August 2020 at $160.16, which is the current technical target.

A baby boom in 2021 and the coming years and rising life expectancy supports growing revenues and earnings for Kimberly-Clark. KMB has been a growth stock since the late 1980s, and that trend is likely to continue over the coming years.


KMB shares were trading at $137.17 per share on Thursday afternoon, up $0.23 (+0.17%). Year-to-date, KMB has gained 2.63%, versus a 9.52% rise in the benchmark S&P 500 index during the same period.


About the Author: Andrew Hecht


Andy spent nearly 35 years on Wall Street and is a sought-after commodity and futures trader, an options expert and analyst. In addition to working with StockNews, he is a top ranked author on Seeking Alpha. Learn more about Andy’s background, along with links to his most recent articles. More...


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