They each sell branded staple products like diapers and tissue paper to consumers around the world. But that's about where the similarities end between Procter & Gamble (PG -1.22%) and Kimberly Clark (KMB -0.37%). The companies have posted dramatically different operating results in the last year, in fact, which put P&G in a stronger, and improving, market position while its smaller rival still struggles with its rebound plan.

Those dynamics suggest income investors would be better off buying Procter & Gamble today even though the stock's yield is lower. Let's take a closer look at this stock match-up.

P&G vs Kimberly Clark stocks



Kimberly Clark

Market cap

$247 billion

$40 billion

Sales growth



Operating profit margin



Dividend yield



P/E ratio



52-week performance



Sales growth excludes acquisitions and divestments and is on a constant-currency basis for the past complete fiscal year. Data sources: Company financial filings and S&P Global Market Intelligence.

Sales and profit momentum

The past few quarterly reports have painted starkly different pictures for these two businesses. Procter & Gamble posted a market-thumping 4% organic sales increase over the last six months, while Kimberly Clark's growth has been closer to 2%. P&G is finding success in areas like beauty and fabric care, which is offsetting a continued slump in its Gillette shaving franchise. Kimberly Clark, on the other hand, has struggled with falling sales volumes in the core U.S. market. P&G's sales footprint isn't as heavily tilted toward that one geography, and that global posture is just another reason the consumer products giant is outperforming right now.

A mother shops with her child.

Image source: Getty Images.

There's even more daylight between the two companies when it comes to profits. Both competitors are trying to strike a balance between market share and the need to raise prices as commodity costs increase. P&G is faring much better at this challenge. Last quarter's 4% organic sales boost was powered by a healthy mix of rising volumes and improving prices. Kimberly Clark's volume was flat over the past year, and its 2% sales uptick in the past six months came entirely from increased prices.

Check out the latest earnings call transcript for Procter & Gamble.

Finances and outlook

P&G is in a stronger financial position, too. Operating profit margin has inched up toward 22% of sales in the last year, while Kimberly Clark's comparable metric declined to 17% from 18.4%. Their outlooks are starkly different on this score. Back in late January, Kimberly Clark CEO Mike Hsu sounded a cautious tone about pricing and volume challenges, saying, "it's appropriate not to plan for much improvement right now." P&G, on the other hand, cited firming demand momentum when it raised its fiscal 2019 guidance.

Investors have responded to these diverging trends by sending P&G shares much higher in the past year while Kimberly Clark's have barely kept up with the market. As a result, Kimberly Clark is cheaper on a price-to-earnings basis and delivers a more robust 3.6% dividend yield.

Still, that discount isn't enough, in my view, to make Kimberly Clark a more attractive buy right now. With sales volumes barely improving, the company is likely to struggle at least through 2019 to get its profitability back on the right track. P&G, meanwhile, has a firm foundation it can build on to start capturing more market share while sending piles of cash back to shareholders through dividends and stock buybacks.