Investors one

Stock Analysis

If you want to compound wealth in the stock market, you can do so by buying an index fund. But you can significantly boost your returns by picking above-average stocks. For example, the Kimberly-Clark de México, S. A. B. de C. V. (BMV:KIMBERA) share price is up 37% in the last 1 year, clearly besting the market return of around 8.1% (not including dividends). So that should have shareholders smiling. The longer term returns have not been as good, with the stock price only 7.5% higher than it was three years ago.

While the stock has fallen 3.1% this week, it's worth focusing on the longer term and seeing if the stocks historical returns have been driven by the underlying fundamentals.

View our latest analysis for Kimberly-Clark de México S. A. B. de C. V

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

During the last year Kimberly-Clark de México S. A. B. de C. V grew its earnings per share (EPS) by 54%. It's fair to say that the share price gain of 37% did not keep pace with the EPS growth. Therefore, it seems the market isn't as excited about Kimberly-Clark de México S. A. B. de C. V as it was before. This could be an opportunity.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

We know that Kimberly-Clark de México S. A. B. de C. V has improved its bottom line lately, but is it going to grow revenue? If you're interested, you could check this free report showing consensus revenue forecasts.

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. As it happens, Kimberly-Clark de México S. A. B. de C. V's TSR for the last 1 year was 44%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!

It's good to see that Kimberly-Clark de México S. A. B. de C. V has rewarded shareholders with a total shareholder return of 44% in the last twelve months. And that does include the dividend. Since the one-year TSR is better than the five-year TSR (the latter coming in at 8% per year), it would seem that the stock's performance has improved in recent times. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Even so, be aware that Kimberly-Clark de México S. A. B. de C. V is showing 2 warning signs in our investment analysis , you should know about...

But note: Kimberly-Clark de México S. A. B. de C. V may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Mexican exchanges.

Find out whether Kimberly-Clark de México S. A. B. de C. V is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Kimberly-Clark de México, S. A. B. de C. V., together with its subsidiaries, manufactures, distributes, and markets disposable products in Mexico.

Solid track record with adequate balance sheet.