Recent Buy: Newell Brands Inc. (NWL)

ID-100426334 Recent Buy: Newell Brands Inc. (NWL)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.

 

 

 

My Thoughts

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 WRK is 23.8% Undervalued based on today’s price of $15.36(3/14/2019).

Newell-Brands-NWL-1024x751 Recent Buy: Newell Brands Inc. (NWL)

Source: Fastgraphs.com

What do you think about the company? Plan on owning it or already do? or why not?

Thanks for reading, and don’t forget to connect with me through Facebook and Twitter to see my latest buys.

Image by Sira Anamwong at FreeDigitalPhotos.net

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Comments

  1. I still don’t know what to think about this company. I did an in-depth review last year and didn’t come away impressed. Since then, the earnings releases, lack of growth, and performance have been underwhelming. On paper, all great brands. But what’s strange is that each brand has many competitors in their respective categories. Rubbermaid in particular. We have some containers of theirs. But I don’t shop/buy them because of loyalty. I’d get hte Fiscal Voyage branded storage containers if that is what got me the best deal.

    For now, I’ll pass!

    Bert

    • Hey Bert. Yes, I understand. This buy is more of a speculative buy for me. The dividend looks safe to me and the upside can be big if the turn things around. This is why I won’t be buying more shares. Right now it is wait and see if they can turn it around, and in the meantime, I get paid a nice dividend.

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