Kimberly Clark Corporation (NYSE:KMB) has reported another healthy quarter with growth in both its earnings and revenue. Even though the company experienced a few drawbacks with fluctuations in currency, but the overall results for Kimberly Clark Corporation (NYSE:KMB) are quite satisfactory. Shares of the company are up by 8% since the start of this year.
There are a few reasons why Kimberly Clark Corp (NYSE:KMB) will continue to see massive growth in the future. They are as follows;
Diaper Sales are increasing in Emerging Markets
Developed markets like the U.S. aren’t really doing any favors to Kimberly Clark Corporation (NYSE:KMB) because of market saturation. However, the company is doing comparatively pretty well in emerging markets where opportunity of growth is still there. Kimberly Clark Corporation (NYSE:KMB) at the moment is doing well with its increased diaper sales.
This year, Kimberly Clark Corp (NYSE:KMB) witnessed an increase in its diaper sales by 25% in Russia and China and 10% in Brazil. It is because of these markets that consumer product giant has seen great growth this year. Encouraged by its current standings in emerging markets, the company has predicted increased sales in these countries in the future.
It is due to these emerging markets that Kimberly Clark Corp (NYSE:KMB) was able to outdo its rival Procter & Gamble in quarterly results. The organic sales of P&G grew by 2% in its last quarter because the company had flat sales volumes for the developing nations.
Increased Wealth for Shareholders
Kimberly Clark Corp (NYSE:KMB) has been working on its Halyard Health business, which houses the medical devices of the company, for a while now. This business makes $1.7 billion each year in sales with its products available in over 100 countries worldwide.
Kimberly Clark Corp (NYSE:KMB) is motivated in growing this business so that it could increase shareholder wealth. The company believes that if it separates its health-care division then it might increase its valuation.
This spinoff will cause an increase in benefits for its shareholders. Kimberly Clark Corp (NYSE:KMB) also received a heavy cash payment from Halyard Health, which the company plans on using for buying back its shares.
Margins to Expand
Kimberly Clark Corp (NYSE:KMB) focuses on cutting costs, which is why it started a cost-savings plan named as FORCE, which involves less spending on administrative and general activities. This includes job reductions, which will keep profits up and above. Kimberly Clark Corp (NYSE:KMB) had cost savings of $100 million with a steady profit margin in the quarter.
Kimberly Clark Corp (NYSE:KMB) is witnessing an increase in stock price with its increasing sales and profits. The company’s broad product portfolio combined with its selling experience is helping the company gain an increased market share as compared to other rivals. The company’s cost cutting program can help the company gain increased future returns.
Kimberly Clark Corporation (NYSE:KMB) announced its solid earnings this year with shareholders getting strong dividends. The company has been increasing the amount of dividends its pays to its shareholders for the past 32 years. The company expects these dividends to continue to increase in the future as well.