I opened a new position with the purchase of Newell Brands Inc. (NWL)
135 shares @ $16.51 on 2/28/2019.
This increases my forward 12-month dividend income by $124.20 to a total of $7,866.76. I also updated my portfolio page to reflect the change.
Here is a description of the company that I pulled from wikipedia.org. Newell Brand is an American worldwide marketer of consumer and commercial products with a portfolio of brands including Rubbermaid food storage, home organization, and reusable container products; Contigo and Bubba water bottles; Coleman outdoor products; Diamond matches; Sharpie, Expo Markers, PaperMate, and a lot more.
As you can see, Newell has a lot of well-known brands. This is something that appeals to me since a lot of people like to stick to brands that they are familiar with.
However, the company is going through a devasting stage. The company is trying to get rid of some of its less profitable brands in its portfolio.
The company currently has a frozen dividend history. It has been paying quarterly dividends of $0.23 since May of 2017.
Normally I like to invest in a company with at least 5 years of consecutive dividend growth history, but I am investing on NWL for the future growth potential and for its high dividend yield of 5.57% at the time I opened a position.
They only have a payout ratio of 58% based on 2019 project earnings of $1.55 from CFRA. for 2020 CFRA is projecting earnings a little higher at $1.95.
The past few years have been rough for Newell shareholders. Shareholders saw a 71% drop in share price from July 2017 till now. However, I am very optimistic about the future and that is why I invest in the company. I do not plan to add any more to my current position. I wanted this position to be a high-risk high return position in my portfolio.
I find NWL to be undervalued, and I recommend it as a BUY at this time. I have a fair value price at $19.02. This means that NWL is 23.8% Undervalued based on today’s price of $15.36(3/14/2019).
What do you think about the company? Plan on owning it or already do? or why not?
Image by Sira Anamwong at FreeDigitalPhotos.net