Newell Brands Inc.’s (NWL - Free Report) leading Contigo brand has reinforced its stainless steel thermal and hydration product lines with the rollout of the LUXE Collection. The collection includes LUXE Stainless Steel Tumbler with a Spill-Proof Lid and Straw, and LUXE AUTOSEAL Vacuum-Insulated Travel Mug. This innovative and modern technology is designed to maintain beverages at the required temperatures with the help of THERMALOCK feature, and also has a spill-proof solution.
The technology is consumer friendly, allowing the users to enjoy beverages for a long time at maintained temperatures with a convenient cleaning practice.
The tumbler has a fully sealed lid and straw, which consists of a built-in valve to provide 100% spill-proof confidence if accidentally tipped or dropped. Also, the model makes cleaning process easier with the separation of the lid and straw. The other product, the AUTOSEAL Travel Mug, has a technology that seals the mug when not in use to ensure more safety. This can be operated through a button that follows users’ commands. Both the tumbler and travel mug are available in various colors and these are top-rack dishwasher friendly.
Newell’s portfolio of well-established brands, such as Sharpie, Paper Mate, Dymo, EXPO, Parker, Contigo, Graco and Calphalon, as well as Mr. Coffee machines and Rawlings baseballs, highlights its fundamental strength. This vast portfolio positions the company for strong growth in the future.
However, the company has been witnessing a soft top-line performance over the last few quarters. It has missed sales estimates in the last four quarters. Lower core sales, foreign currency headwinds and adverse impact from the new revenue recognition standard have been weighing on sales. Further, decline in sales across all segments is hurting Newell’s performance. Consequently, shares of this Zacks Rank #4 (Sell) company have lost 28.1% in the past three months, wider than the industry’s decline of mere 0.7%.
Nevertheless, Newell is smoothly progressing with the execution of the Accelerated Transformation Plan through market share gains, point of sale growth, innovation, e-commerce improvement and cost-saving plans. Notably, the key aspects of the Transformation Plan are restructuring the company into a global consumer product entity, valued at more than $9 billion.
In sync with this initiative, the company plans to offload non-core businesses that account for nearly 35% of sales; utilize $10 billion after-tax proceeds from divestitures and free cash flow to lower debt and make share repurchases; and retain its investment grade rating and annual dividend of 92 cents per share through 2019, targeting a 30-35% payout ratio.
Let’s see whether the company’s Transformation Plan can offset the top-line hurdles in the long run. On an encouraging note, the consistent launch of products with latest technology might boost its sales and profitability.
Three Better-Ranked Stocks in the Consumer Staples Space
Medifast, Inc. (MED - Free Report) has an impressive long-term earnings growth rate of 20% and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Procter & Gamble Company (PG - Free Report) outpaced earnings estimates in each of the trailing four quarters, with average of 3.1%. The company has a Zacks Rank #2 (Buy).
General Mills, Inc. (GIS - Free Report) is also a Zacks Rank #2 stock, which pulled off average four-quarter positive earnings surprise of 6%.
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