Sharpie, Paper Mate parent Newell Brands stock dives toward a 14-year low after dividend slashed by 70%

Shares of Newell Brands Inc.
NWL,
-2.64%
took a 2.5% dive toward a 14-year low in premarket trading Tuesday, after the parent of consumer brands including Sharpie, Paper Mate and Graco, slashed its dividend by 70% as part of a “refresh” of its corporate strategy. The company declared a quarterly dividend of 7 cents a share, down from the previous dividend of 23 cents a share. The new dividend is payable June 15 to shareholders of record on May 31. Based on Monday’s stock closing price of $9.28, the new annual dividend rate cuts the implied dividend yield to 3.02% from 9.91%, but that is still well above the implied yield for the S&P 500
SPX,
-0.23%
of 1.65%. “The company is deliberately resetting its capital allocation priorities and right-sizing the dividend to fund high-return internal supply chain consolidation investment opportunities, while enabling faster de-leveraging of the balance sheet and providing additional financial flexibility,” Newell said in a statement. The dividend cut comes after the company reported in late-April a wider-than-expected first-quarter loss and provided a second-quarter profit outlook that was well below forecasts. Newell’s stock, which was on track to open at the lowest price seen during regular-session hours since April 2009, has plunged 39.4% over the past three months through Monday, while the S&P 500 has gained 1.1%.