Catching Up with Newell Brands Stock Ahead of Earnings

Is the Rubbermaid parent a solid pre-earnings bet?

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Newell Brands Inc. (NASDAQ: NWL) is a global consumer goods company. The U.S.-based firm manufactures, markets, and distributes consumer and commercial products worldwide. Its portfolio of brands includes Rubbermaid, Paper Mate, Sharpie, Dymo, EXPO, Parker, Elmer’s, FoodSaver, Mr. Coffee, Baby Jogger, Spontex and many others.

NWL stock price has nearly than doubled over the past 12 months, adding nearly 144% since dropping to a 10-year low of $11.05 in May of 2020. Additionally, the shares have increased 23% year-to-date. While the equity has been losing steam near the $27 level during the past month, the security has enjoyed solid support at its 30-day moving average and is still just within a chip shot of its April 12, three-year high of $27.43. Newell Brands also offers a $0.92 forward dividend, which is equivalent to a dividend yield of 3.42%.

The company is scheduled to report quarterly earnings before the open on Friday, April 30. Newell Brands has outperformed earnings expectations on all four of its most recent reports. For the first quarter of 2020, Newell Brands beat analyst estimates by a margin of $0.04 and reported an earnings per share (EPS) of $0.09. For the second quarter of 2020, NWL's EPS increased to $0.30 and beat expectations by a margin of $0.12. For the third quarter of 2020, Newell Brands reported another increase in earnings, rising to $0.84 per share and beating estimates by a margin of $0.40. For the final quarterly report of 2020, Newell Brands posted an EPS of $0.56 and beat expectations by a margin of $0.08.

From a fundamental point of view, Newell Brands has a history of inconsistency. Over the past four years, Newell Brands have fluctuated between posting profitable years and taking massive losses to net income. For example, in 2017, the company generated over $2.7 billion in net income but then posted $6.9 billion in net losses in 2018. Most recently, Newell Brands’ net income decreased by $876 million, going from $106 million in 2019 to -$770 million in 2020. NWL's revenues have also followed a similar pattern of inconsistency. Over this past year, revenues dropped by 3.4%. Overall, Newell Brands stock is a wildcard, with its biggest positive attributes being its high dividend yield and an intriguing forward price-earnings ratio of 16.08.


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