Contrasting Newell Brands (NWL) and Energizer (ENR)

Newell Brands (NYSE: NWL) and Energizer (NYSE:ENR) are both consumer staples companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, valuation, analyst recommendations, risk, earnings, dividends and institutional ownership.

Profitability

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This table compares Newell Brands and Energizer’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Newell Brands 18.65% 10.47% 3.99%
Energizer 9.40% 274.69% 10.55%

Dividends

Newell Brands pays an annual dividend of $0.92 per share and has a dividend yield of 3.6%. Energizer pays an annual dividend of $1.16 per share and has a dividend yield of 1.9%. Newell Brands pays out 33.5% of its earnings in the form of a dividend. Energizer pays out 38.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Newell Brands is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider and Institutional Ownership

92.7% of Newell Brands shares are held by institutional investors. Comparatively, 97.2% of Energizer shares are held by institutional investors. 1.0% of Newell Brands shares are held by company insiders. Comparatively, 1.8% of Energizer shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

Newell Brands has a beta of 0.88, indicating that its share price is 12% less volatile than the S&P 500. Comparatively, Energizer has a beta of 0.95, indicating that its share price is 5% less volatile than the S&P 500.

Valuation and Earnings

This table compares Newell Brands and Energizer’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Newell Brands $14.74 billion 0.84 $2.75 billion $2.75 9.27
Energizer $1.76 billion 2.03 $201.50 million $2.98 19.99

Newell Brands has higher revenue and earnings than Energizer. Newell Brands is trading at a lower price-to-earnings ratio than Energizer, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Newell Brands and Energizer, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Newell Brands 0 13 4 0 2.24
Energizer 1 3 4 0 2.38

Newell Brands currently has a consensus target price of $33.33, suggesting a potential upside of 30.82%. Energizer has a consensus target price of $62.43, suggesting a potential upside of 4.78%. Given Newell Brands’ higher probable upside, analysts plainly believe Newell Brands is more favorable than Energizer.

Summary

Energizer beats Newell Brands on 9 of the 15 factors compared between the two stocks.

Newell Brands Company Profile

Newell Brands Inc. is a marketer of consumer and commercial products. The Company’s segments include Writing, Home Solutions, Commercial Products, Baby & Parenting, Branded Consumables, Consumer Solutions, Outdoor Solutions and Process Solutions. Its products are marketed under a portfolio of brands, including Paper Mate, Sharpie, Dymo, Expo, Parker, Elmer’s, Coleman, Jostens, Marmot, Rawlings, Mr. Coffee, Rubbermaid Commercial Products, Graco, Baby Jogger, NUK, Calphalon, Rubbermaid, Contigo, First Alert, Waddington and Yankee Candle. Writing segment consists of the Writing and Creative Expression business. Home Solutions segment designs, manufactures or sources and distributes a range of consumer products under various brand names. Commercial Products segment designs, manufactures or sources and distributes cleaning and refuse products. Its Baby & Parenting segment designs and distributes infant and juvenile products.

Energizer Company Profile

Energizer Holdings, Inc. is a manufacturer, marketer and distributor of household batteries, specialty batteries and lighting products. The Company is a designer and marketer of automotive fragrance and appearance products. It operates through four geographic segments: North America, which consists of the United States and Canada; Latin America, which includes its markets in Mexico, the Caribbean, Central America and South America; Europe, the Middle East and Africa (EMEA), and Asia Pacific, which consists of its markets in Asia, Australia and New Zealand. The Company offers batteries using lithium, alkaline, carbon zinc, nickel metal hydride, zinc air and silver oxide constructions. These products are sold under the Energizer and Eveready brands in the performance, premium and price segments and include primary, rechargeable, specialty and hearing aid products. It manufactures, distributes and markets lighting products, including headlights, lanterns, kid’s lights and area lights.

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