Newell Rubbermaid (NYSE:NWL) increased their dividend 50% recently. The new quarterly payout of $0.15 will begin on December 28th, for shareholders on record November 30th. Newell Rubbermaid's new dividend creates an annual yield of 2.9%. Today, it's time to look at the business and see if the dividend increase, along with recent earnings, can send the shares higher.
Here is a list of brands from Newell Rubbermaid that you may have heard of:
· Paper Mate
· Rubbermaid Commercial
One of the positives going forward for Newell Rubbermaid is "Project Renewal" restructuring. The company is investing millions of dollars to restructure business units. When completed, the restructuring will provide annual savings of $180 to $225 million by the second quarter of 2015. The company will begin reporting its quarterly results with new business segments beginning in the upcoming fourth quarter.
The new business segments will be:
· Tools: Irwin, Lenox, Dymo Industrial
· Commercial Products: Rubbermaid Commercial Products, Rubbermaid Healthcare
· Writing: Sharpie, Paper mate, Expo, Prismacolor, Parker, Waterman
· Baby & Parenting: Graco, Aprica, Teutonia
· Home Solutions: Rubbermaid, Calphalon, Levolor, Kirsch, Goody
· Specialty: Bulldog, Ashland, Shur-Line, Dymo, Endicia, Mimio
In the third quarter, net sales declined 0.9% to $1.54 billion. Adjusted earnings per share were reported as $0.37. The company re-affirmed guidance for the full fiscal year. Newell Rubbermaid sees earnings per share of $1.63 to $1.69. Net sales are expected to increase 2-3% for the year.
Sales by segment:
· Newell Consumer: $814.6 million, -2.1%, core sales -0.4%
· Newell Professional: $535.4 million, -1.1%, core sales +2.5%
· Baby & Parenting: $185.3 million, +5.2%, core sales +7.8%
At a recent Back to School Investor Conference, Newell Rubbermaid laid out their "5 Ways to Win". Listed below are the new strategies aimed at helping the company into the future:
· Make brands really matter
· Build an execution powerhouse
· Unlock trapped capacity for growth
· Extend our boundaries
· Develop a growth team
The company also has a three step phase going into 2015. The first phase, which the company is currently in, centers on "Delivery". The company wants to consistently do what they say, and will focus on this aspect through 2013. In 2013 and 2014, the company will shift to "Strategic", by shaping the future. "Acceleration" is the last step as the company accelerates performance in 2015 and beyond.
Analysts on Yahoo Finance are calling for fourth quarter earnings of $0.42, from $1.52 billion in revenue. On the fiscal year, analysts expect earnings per share of $1.69, from $5.9 billion in revenue. The company has beat earnings estimates each of the last three quarter (+6.5%, +4.4%, +6.8%).
Back in 2008, Newell paid a quarterly dividend of $0.21. That amount was cut all the way down to $0.05, as the consumer company was hit hard by the recession and tightened its finances. Recently, Newell has begun to return more money back to shareholders by dividends and share buybacks. The company recently bought back 1.5 million shares at a total purchase price of $25.9 million.
Shares of Newell Rubbermaid trade at $20.14, closing in on fifty two week highs. Shares have traded between $14.22 and $21.33 over the last year. I think the company has a great three year plan going forward. The costs savings realized from restructuring will lead to acquisitions and money returned to shareholders. Stable core and growing brands will power the way as the company enters emerging markets and creates new products from popular brands. This is a great company to hold for the future, and now with a 3% yield, you get paid to wait.