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Are You Tuned to Newell (NWL) Stock's Solid Growth Story?
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Apart from buying stocks with solid prospects and selling those that appear risky, a prudent investment strategy also advises investors to hold on to stocks which appear promising over the long term. Is Newell Brands Inc. (NWL - Free Report) one such stock? Let’s find out.
Delving Deeper
This leading home and office products’ manufacturer has been benefiting from its robust brand portfolio, solid strategic initiatives and spectacular earnings history. Notably, shares of this Zacks Rank #3 (Hold) company have jumped 14.3% year to date.
To begin with, we note that Newell has been keen on strengthening its portfolio with strategic buyouts and investing in its key segments, reducing activities with marginal profitability, and exiting certain businesses and markets. With regard to this, Newell recently sold its Levolor and Kirsch window coverings brands. Last year, the company acquired Jarden Corp., which brought four new segments under its ambit.
Moving to Newell’s strategic initiatives, the company remains on track with its Project Renewal Program, thanks to which it expects annual cost savings to approach $700 million by 2017 end or 2018 beginning. The company intends to use a major portion of the savings to accelerate growth by investing the same in business, while the remaining cost savings are expected to reflect in earnings.
We believe that these endeavors and the company’s focus on achieving growth via acquisitions have been driving its results for a while now. Incidentally, Newell hasn’t missed earnings estimates even once in the past seven years now. Isn’t it a strong enough reason to take a look at this stock?
Focusing on the company’s last reported second-quarter 2016 results, which also marked its first quarter wherein results of the Jarden business were included, we note both top and bottom lines surpassed the Zacks Consensus Estimate. Results were largely driven by Jarden’s sales contribution. Going forward, Newell remains confident of attaining its 2016 earnings and sales targets, as is reflected by its reiterated guidance.
Apart from this, Newell boasts a strong balance sheet that offers it the financial flexibility to enhance shareholder returns and drive future development through value-added investments aimed at accelerating growth and expanding margins. The company’s commitment toward enhancing shareholder value is evident from its robust dividend payment history and share repurchase programs.
However, the company’s significant global presence exposes it to adverse currency movements as Newell operates widely in Canada, Japan and Europe. Hence, the prevalence of foreign currency headwinds remains a threat to the company’s future results.
Nonetheless, let’s wait and see if the robust growth drivers can counter this hurdle and help Newell sustain its solid momentum. Until then, you can count on some other consumer staples stocks like The Clorox Company (CLX - Free Report) , with a Zacks Rank #1 (Strong Buy), Kao Corporation and Ollie's Bargain Outlet Holdings, Inc. (OLLI - Free Report) , with a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
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Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>
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Are You Tuned to Newell (NWL) Stock's Solid Growth Story?
Apart from buying stocks with solid prospects and selling those that appear risky, a prudent investment strategy also advises investors to hold on to stocks which appear promising over the long term. Is Newell Brands Inc. (NWL - Free Report) one such stock? Let’s find out.
Delving Deeper
This leading home and office products’ manufacturer has been benefiting from its robust brand portfolio, solid strategic initiatives and spectacular earnings history. Notably, shares of this Zacks Rank #3 (Hold) company have jumped 14.3% year to date.
NEWELL BRANDS Price and Consensus
NEWELL BRANDS Price and Consensus | NEWELL BRANDS Quote
To begin with, we note that Newell has been keen on strengthening its portfolio with strategic buyouts and investing in its key segments, reducing activities with marginal profitability, and exiting certain businesses and markets. With regard to this, Newell recently sold its Levolor and Kirsch window coverings brands. Last year, the company acquired Jarden Corp., which brought four new segments under its ambit.
Moving to Newell’s strategic initiatives, the company remains on track with its Project Renewal Program, thanks to which it expects annual cost savings to approach $700 million by 2017 end or 2018 beginning. The company intends to use a major portion of the savings to accelerate growth by investing the same in business, while the remaining cost savings are expected to reflect in earnings.
We believe that these endeavors and the company’s focus on achieving growth via acquisitions have been driving its results for a while now. Incidentally, Newell hasn’t missed earnings estimates even once in the past seven years now. Isn’t it a strong enough reason to take a look at this stock?
Focusing on the company’s last reported second-quarter 2016 results, which also marked its first quarter wherein results of the Jarden business were included, we note both top and bottom lines surpassed the Zacks Consensus Estimate. Results were largely driven by Jarden’s sales contribution. Going forward, Newell remains confident of attaining its 2016 earnings and sales targets, as is reflected by its reiterated guidance.
Apart from this, Newell boasts a strong balance sheet that offers it the financial flexibility to enhance shareholder returns and drive future development through value-added investments aimed at accelerating growth and expanding margins. The company’s commitment toward enhancing shareholder value is evident from its robust dividend payment history and share repurchase programs.
However, the company’s significant global presence exposes it to adverse currency movements as Newell operates widely in Canada, Japan and Europe. Hence, the prevalence of foreign currency headwinds remains a threat to the company’s future results.
Nonetheless, let’s wait and see if the robust growth drivers can counter this hurdle and help Newell sustain its solid momentum. Until then, you can count on some other consumer staples stocks like The Clorox Company (CLX - Free Report) , with a Zacks Rank #1 (Strong Buy), Kao Corporation and Ollie's Bargain Outlet Holdings, Inc. (OLLI - Free Report) , with a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>