Contrasting Newell Brands (NWL) and Armstrong World Industries (AWI)

Armstrong World Industries (NYSE: AWI) and Newell Brands (NYSE:NWL) are both construction companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, analyst recommendations, earnings, profitability, valuation and dividends.

Dividends

Newell Brands pays an annual dividend of $0.92 per share and has a dividend yield of 3.4%. Armstrong World Industries does not pay a dividend. Newell Brands pays out 33.5% of its earnings in the form of a dividend.

Risk & Volatility

Armstrong World Industries has a beta of 1.69, indicating that its share price is 69% more volatile than the S&P 500. Comparatively, Newell Brands has a beta of 0.8, indicating that its share price is 20% less volatile than the S&P 500.

Earnings & Valuation

This table compares Armstrong World Industries and Newell Brands’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Armstrong World Industries $893.60 million 3.47 $154.80 million $3.02 19.83
Newell Brands $14.74 billion 0.89 $2.75 billion $2.75 9.83

Newell Brands has higher revenue and earnings than Armstrong World Industries. 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.

Profitability

This table compares Armstrong World Industries and Newell Brands’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Armstrong World Industries 13.54% 41.44% 8.42%
Newell Brands 14.93% 10.05% 3.99%

Institutional and Insider Ownership

90.5% of Newell Brands shares are held by institutional investors. 0.6% of Armstrong World Industries shares are held by insiders. Comparatively, 1.0% of Newell Brands shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and target prices for Armstrong World Industries and Newell Brands, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Armstrong World Industries 1 6 3 0 2.20
Newell Brands 0 12 4 0 2.25

Armstrong World Industries currently has a consensus target price of $61.57, indicating a potential upside of 2.79%. Newell Brands has a consensus target price of $31.29, indicating a potential upside of 15.79%. Given Newell Brands’ stronger consensus rating and higher probable upside, analysts clearly believe Newell Brands is more favorable than Armstrong World Industries.

Summary

Newell Brands beats Armstrong World Industries on 9 of the 16 factors compared between the two stocks.

About Armstrong World Industries

Armstrong World Industries, Inc. designs, manufactures, and sells ceiling systems primarily for use in the construction and renovation of residential and commercial buildings worldwide. It principally offers mineral fiber, fiberglass wool, and metal ceiling systems. The company produces suspended mineral fiber and soft fiber ceiling systems; suspension system (grid) and ceiling component products; and acoustical ceiling, wall, and structural solutions. It sells its commercial ceiling materials and accessories to resale distributors and ceiling system contractors; residential ceiling products to wholesalers and retailers, such as large home centers; and architectural specialties products to resale distributors and ceiling systems contractors. The company was incorporated in 1891 and is headquartered in Lancaster, Pennsylvania.

About Newell Brands

Newell Brands Inc. designs, manufactures, sources, and distributes consumer and commercial products worldwide. The company's Live segment offers household products, including kitchen appliances, gourmet cookware, bakeware and cutlery, food storage and home storage products, fresh preserving products, and home fragrance products; and baby gear, infant care, and health products primarily under Aprica, Baby Jogger, Ball, Calphalon, Chesapeake Bay Candle, Crock-Pot, FoodSaver, Graco, Mr. Coffee, NUK, Oster, Rubbermaid, Sistema, Sunbeam, Tigex, WoodWick, and Yankee Candle brands. Its Learn segment offers writing instruments, including markers and highlighters, pens and pencils; art products; activity-based adhesive and cutting products; and fine writing instruments, labeling solutions, and custom commemorative jewelry and academic regalia primarily under Dymo, Elmer's, Expo, Jostens, Mr. Sketch, Paper Mate, Parker, Prismacolor, Sharpie, Waterman, and X-Acto brands. The company's Work segment offers cleaning and refuse products; hygiene systems; material handling solutions; consumer and commercial totes; and commercial food service and premium tableware products primarily under Mapa, Quickie, Rubbermaid, Rubbermaid Commercial Products, Spontex, and Waddington brands. Its Play segment offers products for outdoor and outdoor-related activities primarily under Berkley, Coleman, Contigo, Ex Officio, Marmot, Rawlings, and Shakespeare brands. The company's Other segment offers plastic products, including closures, contact lens packaging, medical disposables, plastic cutlery and rigid packaging, beauty products, vacuum cleaning systems, and gaming products primarily under Jarden Plastic Solutions, Jarden Applied Materials, Jarden Zinc Products, Goody, Bicycle, and Rainbow brands. Newell Brands Inc. was formerly known as Newell Rubbermaid Inc. and changed its name to Newell Brands Inc. in April 2016. The company was founded in 1903 and is headquartered in Hoboken, New Jersey.

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