Is Newell Brands a Good Investment?

OVERVIEW

Newell Brands Incorporation is a company based in the United States. The company designs, manufactures, and distributes various products around the world. The company sells everything from camping equipment to office supplies and kitchen utensils. The company operates under several brands, including Coleman, Rubbermaid, EXPO, Sharpie, and Crock-Pot. The company was founded in 1903.

Why You Should?

  1. Newell Brands is a great reopening play. Though they have seen great sales during this pandemic, they can continue to see better numbers in a post-covid future. For example, they can report higher sales of office and school supplies, something which has not happened in 2020 due to the closure of these sites. This will benefit the company and its investors.
  2. Under a Biden administration, more COVID-19 stimulus will benefit the company. Consumers will have more disposable income which will mean they can purchase more products from companies like Newell brands. This will benefit the company’s sales in the short to mid-term and will also benefit investors in the company.
  3. The COVID-19 pandemic has caused a spike in sales for some of the products that Newell offers. For example, as more people went outdoors during this pandemic, Newell saw a rise in the sales of Coleman products. Other sales of home appliances have also risen in the past quarters as people spruce up their home offices during this pandemic. This has benefited the company and investors as well.
  4. Newell offers a wide range of products for its consumers. For example, they sell everything from home appliances to office supplies and camping equipment. This has helped the company go through tough economic times, like this pandemic, as they have seen higher sales from other categories while some others see depressed demand. This has benefited the company and investors in the company.
  5. Newell Brands have seen rising revenues and profits over the past couple of financial years due to the reasons mentioned above. This has benefited the company make some key acquisitions and has also helped the company grow. Better numbers have also aided the company bounce back from these acquisitions. This has also benefited investors in the company. In the financial year of 2019, the company reported revenues of around 9.71 billion and profits of around 106 million. In the financial year of 2018, the company reported higher revenues of around 10.15 billion but also reported a massive loss of around 6.94 billion. This loss was attributed to one of the companies acqusitions.

Why You Should Not?

  1. Newell faces tough competition from many other brands and companies. Some of these companies include Clorox, Johnson & Johnson, Procter and Gamble, Tupperware, and many others. Many other stores, like Costco’s Kirkland Signature, have their own products which also compete with Newell. This might hurt the company and investors in the future.
  2. The COVID-19 Pandemic has also hurt some of the company’s sectors. For example, as offices and schools shut down, there is lower demand for office supplies. This has hurt some of the companies financial results, which have been somewhat strong despite this pandemic. This has also lowered possible gains for investors.

MY OPINION

In my opinion, I think that Newell Brands is a decent long-term investment due to its position as a good reopening play, hopes for more COVID stimulus, impacts from the COVID-19 pandemic, a wide range of products, and rising revenues and profits. However, tough competition and impacts from this pandemic have also hurt the company.

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Aaditya Patel

Aaditya Patel

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Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.