Newell Brands Inc. (NASDAQ: NWL)

Sector: Consumer Defensive Industry: Household & Personal Products CIK: 0000814453
Market Cap 1.47 Bn
P/B 0.55
P/E -61.33
P/S 0.20
ROIC (Qtr) 1.98
Div Yield % 9.51
Rev 1y % (Qtr) -7.24
Total Debt (Qtr) 5.21 Bn
Debt/Equity (Qtr) 1.93

About

Price action

Investment thesis

Bull case

  • Robust tangible asset base of 6.19B provides 17.58x coverage of working capital 352M, indicating strong operational backing.
  • Tangible assets of 6.19B provide robust 4.27x coverage of other current liabilities 1.45B, indicating strong asset backing.
  • Cash reserves of 229M provide ample 10.41x coverage of acquisition spending 22M, enabling strategic growth opportunities.
  • Operating cash flow of 253M provides strong 2.22x coverage of operating expenses 114M, showing operational efficiency.
  • Strong tangible asset base of 6.19B provides 281.27x coverage of acquisition spending 22M, enabling strategic growth.

Bear case

  • Operating cash flow of 253M barely covers its investment activities of (159M), with a coverage ratio of -1.59, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 229M against inventory of 1.46B, the 0.16 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Operating cash flow of 253M provides thin coverage of dividend payments of (119M) with a -2.13 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • The company's operating cash flow of 253M shows concerning coverage of stock compensation expenses of 71M, with a 3.56 ratio indicating potential earnings quality issues.
  • Free cash flow of (20M) provides weak coverage of capital expenditures of 273M, with a -0.07 ratio suggesting additional external financing needs for growth initiatives.

Peer comparison

Companies in the Household & Personal Products
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 PG PROCTER & GAMBLE Co 344.56 Bn 20.55 4.06 35.95 Bn
2 UL Unilever Plc 162.92 Bn 24.93 2.32 -
3 CL Colgate Palmolive Co 64.98 Bn 22.35 3.23 8.42 Bn
4 EL Estee Lauder Companies Inc 38.59 Bn -41.50 2.67 9.42 Bn
5 KMB Kimberly Clark Corp 33.56 Bn 17.05 1.86 7.30 Bn
6 KVUE Kenvue Inc. 32.45 Bn 22.64 2.16 8.97 Bn
7 CHD Church & Dwight Co Inc /De/ 20.90 Bn 26.71 3.40 2.20 Bn
8 CLX Clorox Co /De/ 12.14 Bn 15.35 1.79 3.08 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.60 1.45
EV to Cash from Ops. EV/CFO 26.77 8.11
EV to Debt EV to Debt 1.30 4.77
EV to EBIT EV/EBIT 23.51 14.54
EV to EBITDA EV/EBITDA 10.77 7.35
EV to Free Cash Flow [EV/FCF] EV/FCF -338.60 2.98
EV to Market Cap EV to Market Cap 4.60 -1.59
EV to Revenue EV/Rev 0.93 2.00
Price to Book Value [P/B] P/B 0.55 -7.69
Price to Earnings [P/E] P/E -61.33 16.46
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) -0.20 9.11
Dividend Payout Ratio % Div Payout % (Qtr) -466.70 12.82
Dividend per Basic Share Div per Share (Qtr) 0.28 0.92
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) -583.33 11.25
Interest Coverage Int. cover (Qtr) 0.93 2.65
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -14.71 -96.96
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -53.64 2.29
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 -2.46
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 980.54 -142.06
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 62.53 -154.15
EBIT Growth (1y) % EBIT 1y % (Qtr) 653.85 -155.18
EBT Growth (1y) % EBT 1y % (Qtr) 93.91 -206.88
EPS Growth (1y) % EPS 1y % (Qtr) 90.00 -158.13
FCF Growth (1y) % FCF 1y % (Qtr) -105.57 -5.66
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -1.32 -1.42
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.64 0.82
Cash Payout Ratio Cash Payout (Qtr) 0.23 0.19
Cash Ratio Cash Ratio (Qtr) 0.09 0.76
Current Ratio Curr Ratio (Qtr) 1.14 2.31
Debt to Equity Ratio Debt/Equity (Qtr) 1.93 -2.80
Interest Cover Ratio Int Coverage (Qtr) 0.93 2.65
Times Interest Earned Times Interest Earned (Qtr) 0.93 2.65
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 8.20 -32.28
EBIT Margin % EBIT Margin % (Qtr) 3.97 -37.76
EBT Margin % EBT Margin % (Qtr) -0.29 -40.89
Gross Margin % Gross Margin % (Qtr) 34.00 50.05
Net Profit Margin % Net Margin % (Qtr) -0.30 -42.94