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Comments (51)

josephaoppenheim profile picture
I dumped NWL several years ago, but still follow it a bit. It’s still a minor consumer staple company, with a decent PE and dividend yield, but with an uncertain future.

I’d like to see it pay down debt, then buy back stock, in order to be a dividend growth stock.
Deep Value Ideas profile picture
@josephaoppenheim I have not been long the stock since a while as well, but as I see it decline in price, it gets increasingly interesting. The fundamentals are okay in my opinion and the company is moving in the right direction.
Willow Street Investments profile picture
Thoughts on NWL earnings today?
Deep Value Ideas profile picture
@Willow Street Investments Thanks for asking. I did not yet take a look I am afraid.
Willow Street Investments profile picture
@Deep Value Ideas NWL getting crushed today...4 years and counting for my investment and still underwater.
Deep Value Ideas profile picture
@Willow Street Investments I noticed - well, there is the dividend - go figure how people feel who invested in tech high-flyers during 2021. NWL has been a trading stock for me, but I have not been long the stock since early 2020.
My HSY and TSN are both near their 52 week high, making their yields unattractive for new money.

NWL pays out on the same dates. It offers me what appears to be a reasonably safe payout that will allow me to increase my income on those dates buying shares near their 52 week low.

I can buy me some NWL paydays to add to my income from HSY and TSN and I don't think I'd mind having cheap shares that pay well in a company with so many ubiquitous brands.

I track dividend payouts direct deposited into my bank account as depreciation of my share cost.

A safe dividend at a low initial share price and a good yield will depreciate its share price really fast.

I'm liking NWL.

Thank you!!!
Deep Value Ideas profile picture
@notyouagain You are welcome, glad you liked the article. I like your thinking - when you are in for the payout (as all dividend investors are sooner or later), Newell is certainly the better pick compared to Fortune and I also consider the payout pretty safe. The company went through a tough 2020 and 2021 and still did not cut the dividend when they had the chance to (when many other firms where suspending their dividends due to the pandemic). I also like the way you manage to receive regular payments throughout the year!
@Deep Value Ideas
It's done. NWL is my newest holding as soon as Computershare withholds the money from my account and buys my shares for me.

I have done everything through Computershare. They'll take the money directly from my bank account to invest.

The only thing that stops me with some Computershare direct stock purchase plans is that not all of them will allow me to select "all dividends paid in cash" as an option.

If a particular plan does offer the "all dividends paid in cash" option, Computershare will direct deposit those dividends on my bank account for me.

NWL's plan has a $5 transaction fee for purchases. That will amount to 0.7% of my initial purchase.

I find the convenience extremely worth it.

But many of my DSPP's at Computershare charge no purchase fees at all - they're paid by the company. They're free.

In my portfolio, those include UNP, EPR, XOM, OHI, STWD, BRX, UGI, and ABBV.

Although ABBV's dspp was transferred to EQ Shareowner Online some time ago, it remains free of purchase fees there as well.

Computershare has been very good to me.
Eq Shareowner Online also direct deposits dividends in my bank account and will direct debit my account when I want to buy more shares as well..
Fortune Brands is an under rated company. I’ve worked for them for the past 10 years and have a long runway ahead in the faucet business. Management is solid and there is a strong push towards the connected home water ecosystem. Check out FLO by MOEN. It will be a game changer on the prevention of water leaks in the home. Insurance companies will be mandating these to minimize payouts soon. Thanks for the article. My thoughts are that I will, personally, be buying as much as I can to take advantage of the softening at this price point.
Deep Value Ideas profile picture
@acs0406 Thanks a lot for stopping by and for sharing your first hand view of the company. My impression is that management is solid indeed but it is always great to hear the opinion from former employees.
Greenhorn Investor profile picture
Thank you for the article
Deep Value Ideas profile picture
@Greenhorn Investor You are welcome, thanks for taking the time to read it.
Nice article. I will stick with NWL for a while longer.
Deep Value Ideas profile picture
@AndreP Thank you for reading. Newell requires patience. My impression is that management has good intentions and is really working towards restoring the company's reputation and profitability.
The Icahn's and Starboard were able to replace the entire c suite at Newell with talented execs a few years who are engineering the turnaround. I think Newell will have good upside over the next few years.
Deep Value Ideas profile picture
@chester babcock I agree, it was good to see Michael Polk leave and Saligram seems really passionate. The partial sale by Icahn was certainly somewhat bearish but his position is still significant.
Thanks for the article.

I have to agree with the others who said these two corporations are really nothing alike. They're not even in the same sector; one is considered industrial and the other is consumer discretionary.

That being said, as a dividend investor, I'll accept slow dividend growth as long as the current yield is attractive. Which probably makes it obvious that I'm in favor of NWL, with the well-covered current 4.3% yield. I also like corporations will well known brands.


I will probably add to my position if the share price goes much lower. My current cost basis is so low that I experience one of those mental glitches when I see the current share price. I reminisce about the COVID market crash.

Long NWL (at $12.00)
Deep Value Ideas profile picture
@Wilbodave You are welcome, thanks for reading.

Certainly, the companies are not directly comparable but nonetheless, it's probably not bad to draw the attention of Newell investors to Fortune and vice versa - both are interesting companies with cyclical behavior that are somewhat underfollowed. Fortune caught my intention shortly after my analysis of Newell two months ago, and I just figured I share my view with the community.

Congrats on your very excellent cost basis on NWL and the great yield on cost. Nevertheless, I view $20 a good price for Newell but am prepared for some volatility going forward. I doubt we see $12 again, unless another external event of significance materializes.
Alexander Schiller profile picture
Thanks for the thorough article.
Deep Value Ideas profile picture
@Alexander Schiller Thank you for taking the time to read it and I am glad you liked it.
02 Apr. 2022
Great article. When I read your reference to the company's origin back in 1969 I thought to myself that your date is way off. If you were to go back to the company's origins in tobacco you would see that the company was formed in 1890 and monopolized the tobacco industry until the antitrust regulators broke them up around 1911. The company rebranded in 1969 as it began to diversify out of the tobacco business and focus on consumer brands. Check out this nice little article about the company's history.

Deep Value Ideas profile picture
@cjr950 Hi and thanks for the comment. Glad you liked the article. Thanks for the link to the company's history, back when it was the mighty American Tobacco Company. With 1969, I was referring to the year when American Brands was founded, i.e., the holding company owning tobacco, insurance, golf, hardware and spirits.
Boris J profile picture
@cjr950 This was one of my first stocks back in my 20s in the Scottrade days of the mid 90s. I thought I was so cool owning a piece of cigarettes, Titleist, and Jim Beam.
RSI Raistlin profile picture
Sold out of my NWL earlier this year due to another opportunity. Sold puts with the hopes of it falling to that level later in the year. A great company which had gone through an amazing balance sheet turnaround over the last few years.
Deep Value Ideas profile picture
@RSI Raistlin Thanks for your comment - selling puts is a good strategy, it might well be that NWL will see sub-$20 again. The company really transformed its balance sheet but the turnaround far from done.
Doug Smiley profile picture
Consumers can buy a pen or a candle even with high inflation. They can't buy cabinets or faucets so easily during a high inflationary environment. I think NWL is the value play going forward. Interesting article.
Deep Value Ideas profile picture
@Doug Smiley Thanks, glad you found the article interesting. I'd argue that consumers always need cabinets and faucets when they move to a new home that requires renovation. Sure, branded products will likely suffer more than non-name store brands, but I'd still view cabinets, doors, faucets, etc. somewhat non-discretionary in comparison to some fancy candles, branded pens or lifestyle equipment.

However, I agree that NWL is the value play (relatively speaking), especially after the recent post-earnings optimism faded rather quickly. Nevertheless, I also view FBHS' valuation pretty good with a long-term horizon in mind.
Nice analysis, but I view the comparison as a bit of apples and oranges due to Fortune's heavy housing concentration. If I'm looking for a peer of NWL, I default to SPB first, although all of the companies that roll up multiple brands are somewhat unique.
Deep Value Ideas profile picture
@CPA022784 Thanks very much, glad you liked it. Certainly, their exposure is not very comparable - I was looking for somewhat cyclical smaller companies and hence took a look at FBHS and NWL. I admit that I always had FBHS in mind as one of those hotchpotch portfolio companies and didn't realize they really focussed on housing-related products since the renaming and the split. In my head, the old behemoth American Brands still existed. :)

Thanks for pointing me to Spectrum Brands, I will gladly take a look.
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