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Moody’s Baa3 Rating for Newell Rubbermaid Senior Unsecured Notes

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Price movement of Newell Rubbermaid

Newell Rubbermaid (NWL) has a market cap of $11.5 billion. NWL rose by 0.44% to close at $43.17 per share on March 21, 2016. The price movements on weekly, monthly, and year-to-date (or YTD) bases were 4.6%, 15.8%, and -1.6%, respectively.

Currently, NWL is trading 8.0% above its 20-day moving average, 13.2% above its 50-day moving average, and 4.8% above its 200-day moving average.

The PowerShares DWA Consumer Staples Momentum ETF (PSL) invests 3.0% of its holdings in Newell Rubbermaid. The ETF tracks an index of US consumer cyclical companies selected and weighted by price momentum. The YTD price movement of PSL is 0.25% as of March 18, 2016.

The competitors of Newell Rubbermaid (NWL) and their market caps are as follows:

  • Fortune Brands Home & Security (FBHS): $8.6 billion
  • Avery Dennison (AVY): $6.3 billion
  • Tupperware Brands (TUP): $2.9 billion
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Moody’s has rated Newell Rubbermaid debt

Moody’s Investors Service has rated Newell Rubbermaid’s $8 billion senior unsecured notes as Baa3. The notes are due in 2019, 2021, 2023, 2026, 2036, and 2046. Net proceeds from these notes will be used to finance the cash consideration of the Jarden acquisition and refinance Jarden’s outstanding debt. Moody’s rated outlook is “stable.”

Performance of Newell Rubbermaid in fiscal 4Q15

Newell Rubbermaid reported fiscal 4Q15 net sales of $1.6 billion, a rise of 2.3% over $1.5 billion in fiscal 4Q14. The company’s gross margin rose by 4.0%, and its operating income fell by 10.2% between fiscal 4Q14 and fiscal 4Q15.

Its net income and EPS (earnings per share) fell to $13.2 million and $0.05, respectively, in fiscal 4Q15, from $52.0 million and $0.19, respectively, in fiscal 4Q14.

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Fiscal 2015 results

In fiscal 2015, NWL reported net sales of $5.9 billion, a rise of 3.3% YoY (year-over-year). Its net income and EPS fell to $350.0 million and $1.29, respectively, in fiscal 4Q15, from $377.8 million and $1.35, respectively, in fiscal 4Q14.

The company’s cash and cash equivalents and inventories rose 37.8% and 1.9%, respectively, in fiscal 2015. Its current ratio and long-term debt-to-equity ratio rose to 1.25x and 1.5x, respectively, in fiscal 4Q15, compared to 1.21x and 1.1x, respectively, in fiscal 4Q14.

The price-to-earnings and price-to-book value ratios for Newell Rubbermaid were 45.4x and 6.4x, respectively, as of March 21, 2016.

Projections

Newell Rubbermaid has made the following projections for fiscal 2016:

  • core sales growth in the range of 4.0% to 5.0%
  • net sales growth in the range of 2.5% to 3.5%
  • normalized EPS in the range of $2.21 to $2.30
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