Kimberly Clark (KMB) 11/27/09 PriceWatch Alert Up To 7.96% Return

Posted: Thursday, November 26, 2009 8:47 AM EDT

Kimberly Clark (NYSE: KMB) closed yesterday at $66.01. So far the stock has hit a 52-week low of $43.05 and 52-week high of $66.09. Kimberly Clark stock has been showing support around 65.57 and resistance in the 66.31 range. Technical indicators for the stock are Bullish and S&P gives KMB a neutral 3 STAR (out of 5) hold rating. KMB appears on the Investors Observer Hedged Dividend Income list. For a hedged play on this stock, look at an Apr '10 65 covered call (KMB DM) for a net debit in the $63.06 area. That is also the break even stock price for this trade. This covered call has a 141 day duration, provides 4.47% downside protection and a 3.08% assigned return rate for a 7.96% annualized return rate (comparison purposes only). A lower cost hedged play for this stock would use a longer term call option in place of the covered call stock purchase. To use this strategy look at going long the KMB Jan '11 55 Call (VYK AK) and selling the Apr '10 65 call (KMB DM) for an $8.70 debit. The trade has a 141 day life and would provide 3.50% downside protection and a 14.94% assigned return rate for a 39.00% annualized return rate (for comparison purposes only). Kimberly Clark has a current annual dividend yield of 3.71%. [FBB-Seven Summits Research]

Click Symbol For More News On: (KMB)