Housewares producer Newell Rubbermaid
As part of that effort, the company is changing its brand portfolio a bit. For example, label maker DYMO was acquired last November, and the Little Tikes brand was just sold to privately held MGA Entertainment. In another effort to "increase shareholder value by narrowing our core businesses to those with big, consumer-meaningful brands where investments in innovation and marketing can best be leveraged to drive growth," in the words of CEO Mark Ketchum, most of its European home decor operations have also been sold to Hunter Douglas.
A hint of what Rubbermaid intends to do once it gets the product portfolio balanced just so comes from a planned move into roomier digs for the corporate HQ. The new 350,000-square-foot facility should be ready for move-in by fall 2008, which happens to coincide with the end of Project Acceleration, and will house twice as many workers as the current building. You don't plan that sort of move unless you either believe in your future prospects or have no concept of fiscal responsibility. I'm betting on the former in this case.
Rubbermaid today sports a generous dividend, with a bigger yield than consumer-products stalwarts like Colgate-Palmolive
It's a classic turnaround story, if all goes to plan. Buy now while yields are fat, and profit later from a rising stock price and hopefully larger per-share payouts. But the balance sheet is looking a bit unbalanced, and nothing is for sure in today's tooth-and-nail consumer goods sector. Due diligence is highly recommended.
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Newell Rubbermaid is a Motley Fool Income Investor recommendation, and Colgate-Palmolive is an Inside Value pick. Try a 30-day free trial to one of our services to see which investing style suits your needs.