Newell Rubbermaid Inc. (NWL), one of the leading manufacturers of home and office products, hit a 52-week high of $37.72 yesterday, before eventually closing at $37.64 and surging 19.4% year-to-date.
Newell is riding on growth initiatives centered on its Growth Game Plan, as is evident from its various recent acquisitions. Also, the company is gaining momentum from its shareholder-friendly moves, cost-cutting measures and robust earnings.
Most recently, Newell purchased Baby Jogger Holdings from The Riverside Company. With its highly popular stroller brands like City Select, City Mini and other sub-brands, it will form part of Newell’s Baby and Parenting segment, being a perfect fit for Newell’s Graco and Aprica businesses. Shares of the company have jumped 8.4% since the closure of the acquisition.
Prior to that, the company strengthened its portfolio by acquiring bubba brands inc. from its parent company, In Zone Holdings Inc. and Ignite Holdings, LLC ("Ignite") from private equity firm, North Castle Partners. All these buyouts were made with the expectation of these brands being accretive to Newell’s growth rate, normalized earnings per share as well as its normalized operating income margin within the first year of the deal.
The company remains on track to achieve significant cost savings by means of its Project Renewal Program, further highlighting its commitment toward enhancing performance.
Moreover, Newell boasts a solid balance sheet, which, coupled with ample free cash flow, offers it the financial flexibility to enhance shareholder returns and drive future growth through value-added investments. These investments are aimed at accelerating growth and expanding margins. The company’s commitment toward enhancing shareholder value is evident from its robust dividend payment history and share repurchase programs.
As an example, Newell recently expanded and extended its share repurchase program, under which the company is slated to buy back up to $500 million worth of shares by the end of 2017. This move further exhibits the company’s confidence in the ongoing Game Growth Plan and long-term outlook.
Driven by all its aforementioned initiatives, the company posted third-quarter 2014 adjusted earnings of 58 cents a share that surpassed the Zacks Consensus Estimate of 55 cents and rose 11.5% year over year. Also, this Zacks Rank #3 (Hold) stock’s net sales rose 1.3% to $1,484.5 million from the year-ago quarter though it fell short of the Zacks Consensus Estimate of $1,526 million.
All these factors speak positively about the company, hint at its solid growth prospects and instill confidence among investors. Further, Newell’s last traded price is 4.4% below the Zacks Consensus average analyst price target of $39.36, leaving further room for an upside stock potential.
Apart from Newell, The Kroger Co. (KR), Lowe's Companies Inc. (LOW) and The Clorox Company (CLX) also hit 52-week highs of $64.67, $67.87 and $104.72, respectively, on Dec 22, 2014.
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