Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Newell Rubbermaid Inc. (NWL), Jarden Corp (JAH): Housewares Have a Spot in Your Cupboard And Your Portfolio

I’m a big fan of the Peter Lynch school of thought to buy what you know. One of the best places to look for ideas for your portfolio is in your cupboards, whether in the kitchen or the bathroom. Chances are that many of the same items are in your neighbor’s cupboards as well. The following companies have a strong economic moat with brands and products that we all use and can’t imagine living without.

Newell Rubbermaid Inc. (NYSE:NWL)

The essential home organizer

Newell Rubbermaid Inc. (NYSE:NWL) is best known for its Rubbermaid food storage, home organization, and refuse container products. The company also owns the world’s broadest assortment of writing instruments with the brands Sharpie, Paper Mate, Parker, Waterman, and Uni-Ball. Newell Rubbermaid Inc. (NYSE:NWL) also owns the Graco line of baby products.

In the first quarter of this year, core sales grew 9.5%. The strongest growth was seen in commercial products and the baby-products divisions. Earnings, however, fell to $0.19 per share from $0.27 per share in the year-ago period. The decline was due to increased restructuring costs, a loss from discontinuing the hardware and teach platform businesses, which the company is in the process of selling, and a loss from currency devaluation in Venezuela.

For the rest of the year, Newell Rubbermaid Inc. (NYSE:NWL) expects core sales to increase 2% to 4%. Earnings per share are forecast to be between $1.78 and $1.84 per share compared to last year’s $1.67 per share. The company is undergoing Project Renewal where cumulative cost savings are expected to be between $270 million and $325 million by the second quarter of 2015. The cost savings will be reinvested in the business to strengthen its brands and accelerate growth.

The products of everyday life

Jarden Corp (NYSE:JAH) has grown mainly through acquisitions and it sells items for the home and outdoors, particularly camping items. The company’s brands include Coleman, Rawlings, Bionaire, Crock-Pot, Mr. Coffee, Oster, Sunbeam, and First Alert.

In the first quarter of this year, organic sales grew 4%. Net sales rose to $1.6 billion from $1.5 billion in the prior year. The gross margin remained the same at 28.1%. Jarden Corp (NYSE:JAH) reported a loss of $4.4 million; but excluding inventory charged to the cost of sales, currency devaluations, amortization of several items and a loss related to the extinguishment of debt, the company actually earned $33.1 million.

Going forward, the focus at Jarden Corp (NYSE:JAH) is increasing its revenue outside of the U.S., particularly in Brazil and China. Currently, Jarden gets 40% of its revenue from outside the U.S. and wants to increase that percentage. To do so, Jarden Corp (NYSE:JAH) invested $385 million in its brands last year. New products continue to drive sales as one-third of all revenue has come from products created in the last three years.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.