Legendary investor Warren Buffett famously popularized the term economic "moat" to describe a company's ability to survive competitive threats. Just like a castle wants to be protected with a wide moat, a business needs to have durable competitive advantages to outlast new competitors trying to take market share. Strong brands are a big way to achieve a wide economic moat, particularly when it comes to consumer products manufacturers.

Kimberly-Clark (KMB ) has a large product portfolio filled with leading brands. This has given the company brand loyalty from customers, which in turn leads to pricing power. Its five billion-dollar brands have particularly helped boost the company over the course of its existence. The end result is that Kimberly-Clark is a time-tested Dividend Aristocrat that has increased its dividend for 48 years. With a long list of strong brands and a 3% dividend yield, Kimberly-Clark continues to be an attractive stock for dividend growth investors.

Strong Results In A Tough Climate

Kimberly-Clark is a diversified global consumer products manufacturer. Its product portfolio includes paper towels, diapers, tissues, and more. It operates two segments, Personal Care and Consumer Tissue, which represent the company's consumer businesses. Kimberly-Clark also operates KC-Professional, which sells products to business customers. The company produces over $18 billion in annual sales. It has five brands that each generate over $1 billion in annual sales: Huggies, Kleenex, Kotex, Cottonelle, and Scott.

Kimberly-Clark has also performed well so far this year. In the most recent quarter, the company beat estimates easily on sales and earnings-per-share. Sales increased 8% to $5 billion, due to 11% organic growth. Volumes rose 8% for the quarter, which shows strong consumer demand. At a time when so many parts of the economy are struggling from the coronavirus crisis, top-quality consumer products companies like Kimberly-Clark have actually benefited from consumers stockpiling their pantries with staples products. Adjusted earnings-per-share increased 28% for the quarter, a very impressive performance.

The company's long history of growth has fueled its impressive dividend history. Kimberly-Clark has paid a dividend to its shareholders for more than 80 years. It has also increased its dividend for 48 consecutive years, which places the company in unique territory. Its dividend increase streak places it on the list of Dividend Aristocrats, a group of 65 stocks in the S&P 500 Index with 25+ consecutive years of dividend increases. It is just two years away from joining an even more exclusive list, the Dividend Kings, which represent 30 stocks that have each increased their dividends for 50+ consecutive years.

Kimberly-Clark is a sure bet to join the list of Dividend Kings, as it should have little trouble raising its dividend each year. It operates a business model that is highly resistant to recessions, due to the simple fact that people will always need paper towels, diapers, tissues, and other personal care products. Such stability provides the company with steady profits, even when the economy enters a recession.

Dividend Investors: Clean Up With Kimberly-Clark

Kimberly-Clark stock yields 3% right now. While there are many stocks with significantly higher yields, investors should be wary of extreme high-yielders which can be "value traps" that destroy shareholder value. Instead, investors should focus on the sustainability of a company's dividend payout. On this measure, few companies can beat Kimberly-Clark. Its strong brands and wide economic moat should ensure continued dividend increases every year for the foreseeable future.