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Gina Sanchez reveals a stock that’s good for both inflation and recession

By:
on Aug 19, 2022
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  • Sanchez says Kimberly Clark is a good pick for inflation.
  • She's convinced KMB will do good in a recession as well.
  • The personal care products company is down 4.0% YTD.

Kimberly Clark Corp (NYSE: KMB) has recovered more than 12% from its low in mid-June but Gina Sanchez (Chief Market Strategist at Lido Advisors) says the stock has potential for more.

Kimberly Clark has the pricing power to weather inflation

The Irving-headquartered multinational, she says, is super in terms of pricing power that makes it a great pick for an inflationary environment. This afternoon on CNBC’s “The Exchange”, Sanchez noted:

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Kimberly Clark has shown a lot of talk around inflation fears and what that’ll do to consumers. Finding companies that’re not only quality, have good cash flows and revenue, but also finding companies that can flex into their pricing power.

Wall Street, however, currently has a consensus “hold” rating on the Kimberly Clark stock that pays a dividend yield of 3.39%.

Earlier this month, Ethisphere said Kimberly Clark was one of the world’s most ethical companies.

Kimberly Clark is just as well-positioned for a recession

Interestingly, Sanchez is convinced the personal care products company will do just as good in a recession as well since it has a range of items on its portfolio that remain well in demand during an economic downturn. She said:

Remember, people still need things like diapers and feminine care and adult care and tissues and cleaning products. And they are able to slightly raise prices, expand their margins and expand their profitability.

The U.S. central bank has so far signalled no intent of slamming the breaks on lifting rates even after two consecutive quarters of negative GDP, reiterating that its willing to risk a recession so long that it cures inflation.

Last month, Kimberly Clark reported its Q2 financial results that came in better than the Street estimates. It forecasts up to $6.0 of adjusted EPS this year on a 2.0% to 4.0% increase in net sales.

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