NEWELL RUBBERMAID INC. $16 - New York symbol NWL

NEWELL RUBBERMAID INC. $16 (New York symbol NWL; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 277.7 million; Market cap: $4.4 billion; Price-to-sales ratio: 0.7; WSSF Rating: Average) makes plastic storage bins, tools, window blinds, pens and a number of other household items. Its top brands include Rubbermaid, Sharpie, Paper Mate, Waterman and Levolor. In response to falling sales, Newell is closing plants and streamlining its distribution operations. It’s also selling low-margin businesses, particularly those that use large amounts of plastic resins. These are made from oil, so these moves will cut Newell’s exposure to volatile oil prices. In all, the company will pay $475 million to $500 million in severance and other costs. However, the plan should lower Newell’s costs by $175 million to $200 million a year by the end of 2010. So far, the company has realized $100 million of these savings. If you exclude restructuring costs, Newell’s earnings in the second quarter of 2009 fell 3.6%, to $131.9 million from $136.8 million. Earnings per share fell 4.1%, to $0.47 from $0.49, on more outstanding shares. Sales fell 17.6%, to $1.5 billion from $1.8 billion. The drop was mostly the result of business sales. Newell’s shares trade at 12.7 times the $1.26 a share that the company will likely earn in 2009 The $0.20 dividend yields 1.3%. Newell Rubbermaid is a buy.