Given the recent market selloff, I inevitably get asked what stocks I think are the best deal right now. My first response is always: Any long-term holding you plan to continue holding where the current price is lower than your cost basis. One of my favorite plays right now is Kimberly-Clark Corp. (KMB), writes Kelly Green, editor of Dividend Digest.
These are stocks that are truly on sale for you. You liked them at your original buying price, and you want to collect them for some future goal, so don’t miss out on a sale. The current rotation has put some of my favorite stocks above my recommended buy-up-to prices. I’ve mentioned them all here before and hope you’re sitting on nice gains on them right now.
But KMB is a stock you can probably buy and hold forever. I can’t see a future where we don’t use toilet paper, diapers, and paper towels. Its shares were down 4% last week, which matters because they’re trading close to the price needed to lock in a 3.5% minimum yield. The company also recently raised its dividend for the 53rd consecutive year.
Kimberly-Clark Corp. (KMB)
The share price drop and the new $1.26 per quarter dividend are the only reasons we can lock in our minimum yield right now. We can use the same formula I’ve explained before to find our recommended buy-up-to price: Annual dividends divided by the decimal equivalent of our desired yield. The result shows us that you’d need to buy shares for under $144 to lock in at least 3.5%.
There are always bargains in the market if you know when and where to look. Now is an opportune time. Use it to your advantage, no matter what your investing strategy
Recommended Action: Buy KMB.
