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Newell Rubbermaid Will Complete Jarden Acquisition by April 15

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Price movement of Newell Rubbermaid

Newell Rubbermaid (NWL) has a market cap of $12.2 billion. NWL rose by 2.8% to close at $45.54 per share on April 1, 2016. The price movements on a weekly, monthly, and year-to-date (or YTD) basis were 6.0%, 13.0%, and 3.8%, respectively.

Currently, NWL is trading 8.2% above its 20-day moving average, 16.7% above its 50-day moving average, and 10.1% above its 200-day moving average.

The PowerShares DWA Consumer Staples Momentum Portfolio ETF (PSL) invests 3.0% of its holdings in Newell Rubbermaid. This ETF tracks an index of US consumer cyclical firms selected and weighted by price momentum. The YTD price movement of PSL was 0.44%.

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

  • Fortune Brands Home & Security (FBHS) – $8.9 billion
  • Avery Dennison (AVY) – $6.5 billion
  • Tupperware Brand (TUP) – $2.9 billion
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Newell’s acquisition of Jarden

Newell Rubbermaid is set to complete the acquisition of Jarden Corporation by April 15, 2016. The value of this transaction is $15 billion. TheStreet Ratings team has rated the company as a “hold” with a C+ rating.

Performance of Newell Rubbermaid in fiscal 4Q15

Newell Rubbermaid (NWL) reported fiscal 4Q15 net sales of $1,560.8 million, a rise of 2.3% compared to net sales of $1,526.0 million. The company’s gross margin rose by 4.0%, and its operating income fell by 10.2% in fiscal 4Q15 compared to fiscal 4Q14.

Its net income and EPS (earnings per share) fell to $13.2 million and $0.05, respectively, in fiscal 4Q15, compared to $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 $5,915.7 million, 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, compared to $377.8 million and $1.35, respectively, in fiscal 4Q14.

Newell’s cash and cash equivalents and inventories rose by 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 of Newell Rubbermaid were 47.9x and 6.7x, respectively, as of April 1, 2016.

Projections

Newell Rubbermaid (NWL) has made the following projections for fiscal 2016:

  • Core sales growth in the range of 4.0%–5.0%.
  • Net sales growth in the range of 2.5%–3.5%.
  • Normalized EPS in the range of $2.21–$2.30.

In the final article of this series, let’s take a look at Whirlpool (WHR).

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