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Newell Brands (NWL) to Sell Pine Mountain & Diamond Business
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Consumer goods behemoth, Newell Brands Inc. (NWL - Free Report) is smoothly progressing with plans on simplifying and strengthening portfolio. As part of this, the company has agreed to sell the Pine Mountain and Diamond businesses to Royal Oak Enterprises LLC for an undisclosed amount. Royal Oak is a renowned producer of charcoal and grilling products.
The sale, which is expected to be completed in the second quarter of 2017, will include Pine Mountain’s fire starters and fire logs business, along with Diamond’s matches, fire starters, lighters, toothpicks, clothespins and clotheslines businesses. These businesses jointly account for about $87 million of the company’s annual sale. However, Newell brands revealed that the sale will not include the Diamond branded plastic cutlery products business.
The Pine Mountain and Diamond businesses were put up for sale in Jan 2017, alongside the company’s agreement to sell the Rubbermaid consumer storage totes business.
Newell Brands remains well on track with the divestitures announced under the new Growth Game Plan, while it is also strengthening portfolio through acquisitions. Last week, the company completed the previously agreed acquisition of Sistema Plastics, closed the sale of the Rubbermaid consumer storage business and agreed to sell small central European Teutonia baby stroller business to a private investor.
Other notable actions in this direction include the acquisition of Smith Mountain Industries and the sale of Tools business to Stanley Black & Decker Inc. (SWK - Free Report) . Apart from the aforesaid divestiture, Newell is looking to divest many other businesses, including the Outdoor Solutions Segment’s Winter Sports businesses; the Heaters, Humidifiers, and Fans operations within the Consumer Solutions Segment and the Home Solutions Segment’s Consumer Storage Container unit.
Together, the proceeds from these divestitures will mainly be utilized in reducing the company’s debt. This, in turn, will take Newell closer to leverage ratio target of 3−3.5 times EBITDA in two to three years.
Clearly, these actions reflect the company’s focus on simplifying operating structure, alongside highlighting commitment toward making prudent investments in areas with higher growth potential.
However, we note that shares of Newell have underperformed the Zacks categorized Consumer Products–Staples industry on a year-to-date basis. While this Zacks Rank #2 (Buy) stock yielded nearly 4.8%, the industry gained 10.6%.
Blue Buffalo Pet Products has a long-term earnings growth rate of 13%. Further, it has posted an average beat of 6.8% in the trailing four quarters.
Tupperware, with a long-term earnings growth rate of 12%, has surged 19.5% year to date.
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Newell Brands (NWL) to Sell Pine Mountain & Diamond Business
Consumer goods behemoth, Newell Brands Inc. (NWL - Free Report) is smoothly progressing with plans on simplifying and strengthening portfolio. As part of this, the company has agreed to sell the Pine Mountain and Diamond businesses to Royal Oak Enterprises LLC for an undisclosed amount. Royal Oak is a renowned producer of charcoal and grilling products.
The sale, which is expected to be completed in the second quarter of 2017, will include Pine Mountain’s fire starters and fire logs business, along with Diamond’s matches, fire starters, lighters, toothpicks, clothespins and clotheslines businesses. These businesses jointly account for about $87 million of the company’s annual sale. However, Newell brands revealed that the sale will not include the Diamond branded plastic cutlery products business.
The Pine Mountain and Diamond businesses were put up for sale in Jan 2017, alongside the company’s agreement to sell the Rubbermaid consumer storage totes business.
Newell Brands remains well on track with the divestitures announced under the new Growth Game Plan, while it is also strengthening portfolio through acquisitions. Last week, the company completed the previously agreed acquisition of Sistema Plastics, closed the sale of the Rubbermaid consumer storage business and agreed to sell small central European Teutonia baby stroller business to a private investor.
Other notable actions in this direction include the acquisition of Smith Mountain Industries and the sale of Tools business to Stanley Black & Decker Inc. (SWK - Free Report) . Apart from the aforesaid divestiture, Newell is looking to divest many other businesses, including the Outdoor Solutions Segment’s Winter Sports businesses; the Heaters, Humidifiers, and Fans operations within the Consumer Solutions Segment and the Home Solutions Segment’s Consumer Storage Container unit.
Together, the proceeds from these divestitures will mainly be utilized in reducing the company’s debt. This, in turn, will take Newell closer to leverage ratio target of 3−3.5 times EBITDA in two to three years.
Clearly, these actions reflect the company’s focus on simplifying operating structure, alongside highlighting commitment toward making prudent investments in areas with higher growth potential.
However, we note that shares of Newell have underperformed the Zacks categorized Consumer Products–Staples industry on a year-to-date basis. While this Zacks Rank #2 (Buy) stock yielded nearly 4.8%, the industry gained 10.6%.
Other Key Picks
Other top-ranked stocks in the same industry include Blue Buffalo Pet Products Inc. (BUFF - Free Report) and Tupperware Brands Corporation (TUP - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Blue Buffalo Pet Products has a long-term earnings growth rate of 13%. Further, it has posted an average beat of 6.8% in the trailing four quarters.
Tupperware, with a long-term earnings growth rate of 12%, has surged 19.5% year to date.
Looking for Ideas with Even Greater Upside?
Today's investment ideas are short-term, directly based on our proven 1 to 3 month indicator. In addition, I invite you to consider our long-term opportunities. These rare trades look to start fast with strong Zacks Ranks, but carry through with double and triple-digit profit potential. Starting now, you can look inside our home run, value, and stocks under $10 portfolios, plus more. Click here for a peek at this private information >>