ENR - Energizer: Steady Value Creation From Paying Down Debt

2024-07-08 08:00:53 ET

Summary

• Energizer is a leading consumer staples company producing batteries, portable lighting products, and automotive care products.
• ENR has fallen on hard times after a poorly executed acquisition in 2019. After more than $1 billion in write-offs and restructuring charges, shareholders have little to show for it.
• However, the company may be turning the corner, as ENR was able to generate close to $600 million in FCF in the prior 7 quarters while paying down debt.
• If ENR can continue to execute its strategy of generating FCF and paying down debts, shareholders could see 60-100% in total returns upside over the next 5 years.

I recently came across Energizer Holdings, Inc. ( ENR ) while screening for cheap companies. ENR certainly fits the bit of being 'cheap', as the company trades at just 9.2x Non-GAAP Fwd P/E with a 4.1% dividend yield (Figure 1)....

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