Rubbermaid's Having a Party of Its Own

Plastic may sound boring, but Newell Rubbermaid's (NYSE: NWL  ) third quarter was anything but. Between improvements in earnings and a raised outlook, investors won't be able to seal up their enthusiasm.

The top line grew by more than 6% from last year, with revenue coming in at nearly $1.7 billion. On a reported basis, earnings from continuing operations grew a whopping 49% to $0.61 per diluted share. Adjusting for restructuring charges, earnings from continuing operations increased 43% to $0.66 per diluted share. And then we have normalized earnings growth, which takes out charges and tax items -- this number becomes $0.52 per diluted share, and it represents appreciation of 27%.

As can be seen, this is a no-matter-how-you-slice-it situation -- simply put, Rubbermaid delivered the goods. Its efforts at creating a leaner operating environment for its business appear to be bearing some fruit.

The gross profit margin increased during the quarter, and Rubbermaid expects a nice expansion of the metric for the entire fiscal year with the help of its Project Acceleration. This is key to driving overall performance, and the improvement is impressive, as many companies like Tupperware (NYSE: TUP  ) , Avery Dennison (NYSE: AVY  ) , Kimberly-Clark (NYSE: KMB  ) , and Procter & Gamble (NYSE: PG  ) are trying to keep commodity costs from getting the best of them.

The current uncertainty in the marketplace, stemming from the scary subprime mess (as well as the possibility of a recession), is putting a spotlight on dividend-paying stocks. I think Rubbermaid's stronger earnings position will make it increasingly attractive to investors seeking shelter from the storm.

I think Rubbermaid's management turned in an excellent quarter for its investors, and you've got to like the 3% yield on the stock. One thing to mention about the dividend -- it's been stagnant. As I noted previously, it hasn't been hiked in a long time. Even though I do expect Rubbermaid to increase it at some point, I concede that this is the big negative to the story, especially for dividend fans (of which I am one).

Nevertheless, you have to pay attention to Rubbermaid and its yield. It had a good quarter, it's got some cool brands in its portfolio, and it does look better-positioned for the long term. Tupperware parties may be fun, but so are the Rubbermaid ones.

Open these containers of Foolishness:

Read/Post Comments (0) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 539223, ~/Articles/ArticleHandler.aspx, 10/23/2016 2:23:42 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 day ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/21/2016 4:02 PM
NWL $52.50 Up +0.03 +0.06%
Newell Brands CAPS Rating: ***
AVY $75.50 Down -0.43 -0.57%
Avery Dennison CAPS Rating: ***
KMB $119.58 Up +0.41 +0.34%
Kimberly-Clark CAPS Rating: ****
PG $84.33 Down -0.60 -0.71%
Procter and Gamble CAPS Rating: ****
TUP $60.67 Up +0.65 +1.08%
Tupperware Brands CAPS Rating: ****