Neenah Paper Hits 52-Week High - Analyst Blog

By Zacks Equity Research,

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Shares of Neenah Paper Inc. ( NP ) achieved a 52-week high of $45.00 during yesterday's trading session, before sliding a notch lower to close at $44.85. The stock recorded a solid year-over-year return of 56% on its undeterred uptrend. The average trading volume aggregated 84,746 shares.

Neenah Paper, a global manufacturer of premium, performance-based papers and specialty products used in a variety of applications, is set to report its fourth quarter and full-year 2013 earnings on Feb 18, 2014. The company has manufacturing operations in the United States and Germany.

Growth Drivers

Neenah Paper witnessed strong revenue and earnings growth in the third quarter of 2013, recording a whopping 24% increase in earnings from continuing operations on a per share basis, when compared with the prior-year period. Revenues increased on the back of consistently strong growth in the company's Technical Products and Fine Paper segments despites headwinds such as rising material costs.

Owing to operational synergies from the acquired Southworth brands, Neenah Paper experienced success with regard to its go to-market strategy as well as higher-value price and mix. Despite higher pulp prices, the company's manufacturing efficiencies and improved productivity have ensured sustainable margin expansion. While focusing on its core areas of expertise, Neenah Paper is also striving to diversify its product portfolio in order to drive further growth.

Neenah Paper's overseas business is one of its key growth drivers. Notably, international sales grew over 20% in the last reported quarter and the momentum is expected to continue in the coming quarters as well, aided by the company's footprint expansion abroad.

Neenah Paper increased its dividend on three occasions in 2013. The latest hike in the payout marked a 20% increase in the company's regular annual dividend. Regular disbursement of dividends forms part of Neenah Paper's long-term strategy of providing attractive risk-adjusted returns to stockholders.

Neenah Paper looks well positioned to capitalize on opportunities in growing markets through both organic and inorganic growth. With a strong balance sheet, healthy cash flow and effective management, the company appears poised to exploit value-added opportunities to bolster its prospects.  

Other Stocks to Consider

Neenah Paper belongs to the Paper and Related Products space, an industry which currently ranks among the top 15%, holding a Zacks Industry Rank of 41 out of more than 250 industries. This suggests that the industry is positioned to outperform most of its counterparts.

Neenah Paper presently has a Zacks Rank #3 (Hold). Other players in the industry worth mentioning include Resolute Forest Products Inc. ( RFP ), Stora Enso Oyj ( SEOAY ) and PH Glatfelter Co. ( GLT ). All these stocks sport a Zacks Rank #1 (Strong Buy).

GLATFELTER (GLT): Free Stock Analysis Report

NEENAH PAPER (NP): Free Stock Analysis Report

RESOLUTE FOREST (RFP): Free Stock Analysis Report

STORA ENSO -ADR (SEOAY): Get Free Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Stocks: GLT , NP , RFP , SEOAY

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