Newell’s new focus should pay off

Article Excerpt

NEWELL BRANDS INC. $17 remains a hold. The company (Nasdaq symbol NWL; Income Portfolio, Consumer sector; Shares outstanding: 423.4 million; Market cap: $7.2 billion; Price-to-sales ratio: 0.7; Dividend yield: 5.4%; TSINetwork Rating: Average; www.newellbrands.com) recently completed a plan to fuel long-term gains for investors by narrowing its focus to the following key product lines: writing; baby; home fragrance; food; fishing; appliances and cookware; outdoor and recreation; and safety and security. As part of that restructuring, the company sold three of its less-important businesses in 2019 for $995.7 million. As a result of these moves, Newell’s overall sales in the fourth quarter of 2019 slipped 3.1%, to $2.62 billion from $2.71 billion. If you adjust for the businesses that the company sold—as well as foreign exchange rates—sales fell 1.5%. The lower sales had a much bigger impact on earnings, which dropped 36.4% to $0.42 a share from $0.66. Investors should now expect Newell to earn $1.46 to $1.56 a share for 2020. The stock trades at…

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