The deal will combine "powerful" consumer brands, such as Newell Rubbermaid's Sharpie, Paper Mate and Graco, and Jarden's Yankee Candle, Coleman and Oster, TheStreet's Jim Cramer said on CNBC's Squawk on the Street this morning.
"Almost every single housewares aisle is now going to be this company," Cramer noted. "Consumers are going to have a hard time finding [household items] that aren't this company."
Jarden and Newell Rubbermaid are raising their organic growth rate by combining, he added.
Cramer did admit that he finds Jarden's acquisition of yearbook and class rings maker Jostens, announced in October, "quizzical."
However, the companies will likely argue that it makes sense given Newell Rubbermaid's Sharpie brand, Cramer explained.
"Jostens, again, I find this curious, but there are many things within Newell that, I think, if they rationalize, these two companies can go up," he pointed out.
Most of Jarden's other acquisitions, including Yankee Candle, were "blessed by the market," he mentioned.
This year has been the biggest year ever for mergers and acquisitions, but Cramer stated that any further deals before year-end will "be like the NFC East in terms of quality."
Separately, recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate JARDEN CORP as a Buy with a ratings score of B. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income and solid stock price performance. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 9.7%. Since the same quarter one year prior, revenues slightly increased by 5.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- JARDEN CORP' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, JARDEN CORP increased its bottom line by earning $1.29 versus $1.21 in the prior year. This year, the market expects an improvement in earnings ($2.72 versus $1.29).
- The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Household Durables industry average, but is greater than that of the S&P 500. The net income increased by 10.7% when compared to the same quarter one year prior, going from $108.60 million to $120.20 million.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
- The gross profit margin for JARDEN CORP is currently lower than what is desirable, coming in at 34.39%. Regardless of JAH's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 5.32% trails the industry average.
- You can view the full analysis from the report here: JAH