Should You Invest in Reynolds Consumer Products?

OVERVIEW

Reynolds Consumer Products Incorporation is a company based in the United States. The company designs, manufactures, and distributes consumer products around the world. Some of these products include Reynolds aluminum wrap, trays, and products. Others include Hefty storage and waste bags, Hefty disposable cutlery, and many others. The company was founded in 1947.

Why You Should?

  1. Consumers all around the world stockpiled on paper and disposable products, like the ones that Reynolds offers. This is due to the impacts of the rising number of COVID-19 cases. This has benefited the company’s sales during these tough times.
  2. Reynolds Consumer Products designs and develops strong brand names. Some of these include Hefty and Reynolds Wrap. These names are some of the oldest American brands that there are and most people know what they are getting when they purchase one of these products. This will benefit the company’s future sales and will also benefit investors.
  3. Products like aluminum foils and trays as well as garbage and other small food storage bags are essential in order to maintain a high standard of life. This makes Reynolds a great recession-proof and safe investment. This safe investment is great for people who do not want to invest in another risky company. (By risk, I mean less volatile; the stock can still go down)
  4. Over the past couple of financial years, the company saw rising revenues (except for the financial year of 2019). They have seen rising profits during these past couple of financial years due to lower operating costs. These strong numbers will benefit the company’s future growth and its investors. In the financial year of 2019, the company reported revenues of around 3.03 billion and profits of around 225 million. In the financial year of 2018, the company reported higher revenues at around 3.14 billion but lower profits of around 176 million.

Why You Should Not?

  1. The COVID-19 Pandemic has weakened the demand in the hospitality and restaurant sector in the economy. This has hurt the sales of Reynold’s products in these two key sectors. The company has also seen higher operating costs related to the pandemic. These impacts should be only short to mid-term.
  2. Reynolds faces tough competition from other brands of consumer and household product manufacturers. The company faces tough competition from companies like Clorox, Johnson & Johnson, as well as other in-store brands like Kirkland Signature (Costco) and Great Value (Walmart). This competition might hurt the company’s future sales.

MY OPINION

In my opinion, I think that Reynolds is a great investment due to stockpiling in response to the COVID-19 Pandemic, a strong portfolio of brands, a safe investment opportunity, and increasing profitability numbers. However, impacts from the COVID-19 Pandemic as well as tough competition might hurt the company in the future.

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Aaditya Patel

Aaditya Patel

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