Financial Survey: Spectrum Brands (NYSE:SPB) vs. Reynolds Consumer Products (NASDAQ:REYN)

Spectrum Brands (NYSE:SPB) and Reynolds Consumer Products (NASDAQ:REYN) are both consumer discretionary companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, profitability, dividends, risk, analyst recommendations, earnings and institutional ownership.

Profitability

This table compares Spectrum Brands and Reynolds Consumer Products’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Spectrum Brands	2.56%	5.27%	2.88%
Reynolds Consumer Products	8.44%	16.00%	6.98%

Volatility and Risk

Spectrum Brands has a beta of 0.83, meaning that its stock price is 17% less volatile than the S&P 500. Comparatively, Reynolds Consumer Products has a beta of 0.61, meaning that its stock price is 39% less volatile than the S&P 500.

Earnings and Valuation

This table compares Spectrum Brands and Reynolds Consumer Products”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Spectrum Brands	$2.96 billion	0.43	$124.80 million	$2.68	19.64
Reynolds Consumer Products	$3.70 billion	1.30	$352.00 million	$1.49	15.30

Reynolds Consumer Products has higher revenue and earnings than Spectrum Brands. Reynolds Consumer Products is trading at a lower price-to-earnings ratio than Spectrum Brands, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

26.8% of Reynolds Consumer Products shares are held by institutional investors. 3.9% of Spectrum Brands shares are held by company insiders. Comparatively, 0.2% of Reynolds Consumer Products shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

Spectrum Brands pays an annual dividend of $1.88 per share and has a dividend yield of 3.6%. Reynolds Consumer Products pays an annual dividend of $0.92 per share and has a dividend yield of 4.0%. Spectrum Brands pays out 70.1% of its earnings in the form of a dividend. Reynolds Consumer Products pays out 61.7% 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. Spectrum Brands has increased its dividend for 1 consecutive years. Reynolds Consumer Products is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Spectrum Brands and Reynolds Consumer Products, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Spectrum Brands	0	1	4	0	2.80
Reynolds Consumer Products	0	6	2	0	2.25

Spectrum Brands currently has a consensus target price of $74.80, indicating a potential upside of 42.12%. Reynolds Consumer Products has a consensus target price of $26.75, indicating a potential upside of 17.38%. Given Spectrum Brands’ stronger consensus rating and higher probable upside, analysts plainly believe Spectrum Brands is more favorable than Reynolds Consumer Products.

Summary

Reynolds Consumer Products beats Spectrum Brands on 9 of the 17 factors compared between the two stocks.

About Spectrum Brands

Spectrum Brands Holdings, Inc. operates as a branded consumer products and home essentials company in North America, Europe, the Middle East, Africa, and Asia-Pacific regions. It operates through three segments: Home and Personal Care; Global Pet Care; and Home and Garden. The Home and Personal Care segment provides home appliances under the Black & Decker, Russell Hobbs, George Foreman, PowerXL, Emeril Legasse, Copper Chef, Toastmaster, Juiceman, Farberware, and Breadman brands; and personal care products under the Remington brand. The Global Pet Care segment provides dog and cat chews, treats, wet and dry foods, dog and cat clean-up and food, training, health and grooming, indoor birds, and small animal food and care products under the Good'n'Fun, DreamBone, GOOD BOY, SmartBones, IAMS, EUKANUBA, Nature's Miracle, FURminator, Dingo, 8IN1, Meowee!, and Wild Harvest brands. This segment also offers aquarium kits, stand-alone tanks, and aquatics equipment and consumables under the Tetra, Marineland, Instant Ocean, GloFish, and OmegaSea brands. The Home and Garden segment provides outdoor insect and weed control solutions, and animal repellents under the Spectracide, Garden Safe, Liquid Fence, and EcoLogic brands; household pest control solutions under the Hot Shot, Black Flag, Real-Kill, Ultra Kill, The Ant Trap, and Rid-A-Bug brand names; household surface cleaning, maintenance, and restoration products, including bottled liquids, mops, wipes, and markers under the Rejuvenate brand name; and personal-use pesticides and insect repellent products under the Cutter and Repel brands. The company sells its products through retailers, e-commerce and online retailers, wholesalers, and distributors. Spectrum Brands Holdings, Inc. was founded in 1906 and is headquartered in Middleton, Wisconsin.

About Reynolds Consumer Products

Reynolds Consumer Products Inc. produces and sells products in cooking, waste and storage, and tableware product categories in the United States and internationally. It operates through four segments: Reynolds Cooking & Baking, Hefty Waste & Storage, Hefty Tableware, and Presto Products. The Reynolds Cooking & Baking segment produces aluminum foil, disposable aluminum pans, parchment paper, freezer paper, wax paper, butcher paper, plastic wrap, baking cups, oven bags, and slow cooker liners under the Reynolds Wrap, Reynolds KITCHENS, and EZ Foil brands in the United States, as well as under the ALCAN brand in Canada and under the Diamond brand internationally. The Hefty Waste & Storage segment offers trash bags under the Hefty Ultra Strong and Hefty Strong brands; and food storage bags under the Hefty and Baggies brands. This segment also provides a suite of products, including compostable bags, bags made from recycled materials, and the orange bags. The Hefty Tableware segment offers disposable and compostable plates, bowls, platters, cups, and cutlery under the Hefty brand. The Presto Products segment primarily sells store brand products in food storage bags, trash bags, reusable storage containers, and plastic wrap categories. It offers both branded and store brand products to grocery stores, mass merchants, warehouse clubs, discount chains, dollar stores, drug stores, home improvement stores, military outlets, and eCommerce retailers. The company was founded in 1947 and is headquartered in Lake Forest, Illinois. Reynolds Consumer Products Inc. is a subsidiary of Packaging Finance Limited.