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Topic: Growth Stocks

NEWELL RUBBERMAID INC. $37 – New York symbol NWL

NEWELL RUBBERMAID INC. $37 (New York symbol NWL; Aggressive Growth and Income Portfolios, Consumer sector; Shares outstanding: 271.1 million; Market cap: $10.0 billion; Price-to-sales ratio: 1.8; Dividend yield: 1.8%; TSINetwork Rating: Average; www.newellrubbermaid.com) has gained 23% since we made it our Stock of the Year for 2014.

The company makes plastic storage bins, tools, window blinds, pens and many other household goods.

In the past few years, Newell has aggressively cut its costs, including closing plants. That has freed up cash that it can use to acquire businesses with strong long-term prospects.

For example, the company recently bought Baby Jogger, a privately held maker of premium baby strollers and accessories. Newell can use its large international distribution network to increase Baby Jogger’s sales.

The company is also using the savings to pay down high-interest debt. In addition, it plans to buy back more shares and will probably increase its $0.68-a-share dividend, which yields 1.8%.

However, the higher U.S. dollar could slow Newell’s sales and earnings, as 30% of its revenue comes from overseas. But even so, its profits will likely rise from $1.99 a share in 2014 to $2.20 in 2015. The stock trades at 16.8 times the 2015 estimate.

Newell Rubbermaid is a buy.

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