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Why Kimberly Clark Stock Gained 11% in November

By Demitri Kalogeropoulos - Dec 5, 2018 at 1:05PM

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Investors are getting more optimistic about the consumer products giant's hopes for a growth rebound.

What happened

Consumer products giant Kimberly Clark (KMB 0.39%) shareholders beat the market last month by gaining 11% compared to a 1.8% increase in the S&P 500, according to data provided by S&P Global Market Intelligence.

The uptick still left the stock trailing the market so far in 2018 and over longer time frames including the past one-year, three-year, and five-year periods.

A baby playing with tissue paper.

Image source: Getty Images.

So what

November's stock price increase wasn't driven by any company-specific news, but instead reflected a modest uptick in investor optimism about Kimberly Clark's business. The owner of consumer staples brands like Huggies diapers and Kleenex tissues posted slightly faster growth in its most recent quarter that nevertheless implied market share losses to rivals like Procter & Gamble.

Now what

It's future quarters that investors are more excited about, though, since Kimberly Clark is raising prices across its portfolio right now, which should translate into stronger earnings. The company will also have a new CEO after Thomas Falk steps down at the end of 2018, in a leadership change that could bring about bigger strategic shifts including brand divestments, mergers, or a boost to direct capital returns in the form of dividends and stock repurchase spending.

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