Newell Brands (NASDAQ:NWL) and Armstrong World Industries (NYSE:AWI) are both consumer staples companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, analyst recommendations, valuation, institutional ownership, earnings, profitability and risk.
Valuation and Earnings
This table compares Newell Brands and Armstrong World Industries' revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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Newell Brands | $9.71 billion | 1.08 | $106.60 million | $1.70 | 14.49 |
Armstrong World Industries | $1.04 billion | 3.96 | $214.50 million | $4.78 | 18.00 |
Armstrong World Industries has lower revenue, but higher earnings than Newell Brands. Newell Brands is trading at a lower price-to-earnings ratio than Armstrong World Industries, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
86.5% of Newell Brands shares are held by institutional investors. 0.6% of Newell Brands shares are held by insiders. Comparatively, 0.7% of Armstrong World Industries shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Risk and Volatility
Newell Brands has a beta of 1.06, suggesting that its share price is 6% more volatile than the S&P 500. Comparatively, Armstrong World Industries has a beta of 1.27, suggesting that its share price is 27% more volatile than the S&P 500.
Profitability
This table compares Newell Brands and Armstrong World Industries' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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Newell Brands | -1.11% | 17.83% | 4.80% |
Armstrong World Industries | -7.85% | 49.60% | 12.52% |
Analyst Ratings
This is a breakdown of current ratings and price targets for Newell Brands and Armstrong World Industries, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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Newell Brands | 2 | 5 | 3 | 0 | 2.10 |
Armstrong World Industries | 2 | 6 | 3 | 0 | 2.09 |
Newell Brands presently has a consensus price target of $21.20, suggesting a potential downside of 13.96%. Armstrong World Industries has a consensus price target of $84.00, suggesting a potential downside of 2.39%. Given Armstrong World Industries' higher possible upside, analysts clearly believe Armstrong World Industries is more favorable than Newell Brands.
Dividends
Newell Brands pays an annual dividend of $0.92 per share and has a dividend yield of 3.7%. Armstrong World Industries pays an annual dividend of $0.84 per share and has a dividend yield of 1.0%. Newell Brands pays out 54.1% of its earnings in the form of a dividend. Armstrong World Industries pays out 17.6% 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 has raised its dividend for 1 consecutive years and Armstrong World Industries has raised its dividend for 2 consecutive years.
Summary
Armstrong World Industries beats Newell Brands on 11 of the 16 factors compared between the two stocks.