U.S.-based Kimberly-Clark Corp. and Germany-based Henkel AG & Co. KGaA are two leading multinational consumer products companies within the personal care and household sectors. Standard & Poor's Ratings Services rates both companies 'A' with a stable rating outlook. The generally favorable key credit characteristics of the industry, including noncyclical demand (apart from Henkel's adhesives business), low capital intensity, and strong cash flow generation, underpin the investment-grade ratings. Both Kimberly-Clark and Henkel enjoy strong brand recognition and generate significant free cash flow, which allows them to reward shareholder value and pursue acquisitions. Kimberly-Clark has the slightly stronger business risk profile of the two, in our view, as demonstrated by its higher operating margins, while Henkel has a more conservative financial risk...
Companies mentioned in this report are:
- Kimberly-Clark Corp.
- Henkel AG & Co. KGaA
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Research Type: Commentary
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