The S&P 500 (SNPINDEX: ^GSPC) has become far more concentrated in tech-focused growth companies, many of which have low yields or don’t pay dividends. The changing composition of the index has compressed the S&P 500 dividend yield to just 1.2%, down from around 2% a decade ago.
Investors looking for stocks to boost their passive income have come to the right place. Kimberly-Clark (NASDAQ: KMB) — a leading consumer staples company — has raised its dividend for 54 consecutive years. That makes Kimberly-Clark one of 60 companies that have paid and raised their dividends for at least 50 consecutive years — known as Dividend Kings. But Kimberly-Clark’s dividend track record extends far beyond that time frame, as the company has paid a dividend for 92 consecutive years — a streak that predates the first FM radio broadcast and the invention of the microwave oven.
Here’s why Kimberly-Clark is one of the best value stocks for income investors to buy in April.
Navigating a multiyear downturn
Kimberly-Clark’s yield has soared to 5.3% due to a combination of consistent dividend raises and its falling stock price. The sell-off has gone from bad to worse, and Kimberly-Clark is now hovering around a 12-year low.
Sales growth and profit margins are under pressure due to rising costs and weak consumer spending. But unlike some high-yield stocks with falling earnings that must use debt to fund their payouts, Kimberly-Clark continues to generate plenty of operating cash flow to support its long-term capital spending plans, dividend, and share repurchases.
Kimberly-Clark’s payout ratio is elevated, but its earnings still exceed its dividend payment. Free cash flow (FCF) is barely below the dividend expense, and that’s even when factoring in a substantial decrease in FCF in recent years, amplified by a roughly $200 million increase in input costs in fiscal 2025, mainly due to tariff-related headwinds.
The good news is that Kimberly-Clark expects margins to improve, with organic growth accelerating in the second half of 2026. Management also set its goal to reach at least 40% gross margins by the end of the decade.
What’s more, the stock is dirt cheap, trading at just 16 times trailing-12-month earnings and 12.9 times forward earnings.
A household products and personal care powerhouse
Kimberly-Clark is a textbook example of how great companies can go from cheap to bargain-bin territory when multiple factors magnify investor uncertainty. In Kimberly-Clark’s case, the sectorwide sell-off in consumer staples, inflationary cost pressures due in part to high oil prices, weak consumer spending due to cost-of-living increases, and uncertainty around Kimberly-Clark’s Kenvue acquisition (expected to close in the second half of 2026) give short-term-minded investors multiple excuses to sell the stock.
