What do baking mixes, terrariums, snow globes, pickles, candles, light fixtures, bulk groceries, and powdered laundry soap have in common?
They are just a few of the many things that can be – and sometimes are – made with, packed in, or sold in mason jars.
I don’t expect the average investor to monitor home organization trends, follow the handmade movement, or watch IFC’s Portlandia, but luckily for you all, I do. Once an outdated relic, the humble mason jar is back, and is being used more creatively than ever.
I am too young to have grown up canning fruit, pickling vegetables, and so on, but that hasn’t stopped a growing number of consumers from learning to do so in recent years. Local-food advocates might pickle their own cucumbers if they can’t find local pickles. Healthy eaters might make their own low-sugar jams and jellies. Environmentalists in less-than-ideal climates might can their own tomatoes in the summer so they don’t have to buy canned tomatoes shipped in from far away in the winter. And, of course, survivalists can never stockpile enough food.
Penny-pinching consumers have picked up mason jars, too. It is often cheaper to buy rice, beans, and so on in bulk than to buy it packaged, and some stores offer a small rebate for bringing your own containers. I know people at opposite ends of the economic spectrum who take their own mason jars to the nearest grocery store with bulk bins. Given consumer concerns over BPA and other chemicals leaching into packaged foods, I expect a growing number of consumers will choose glass containers over plastic.
Crafters have also embraced the classic mason jar – its varying sizes offer several options for neatly organizing craft supplies while making them easy to find. The jars are even popular as a craft medium. Today, a search for “mason jar” on Etsy (the largest online marketplace for handmade goods) turned up well over 7,000 items, ranging from a single serving of blueberry pie packed in a wide-mouth jar to solar lanterns made from larger jars.
And here’s the best part: the two most popular brands in the USA are Ball and Kerr, which are both owned by Jarden Home Brands (NYSE: JAH). Bernardin, the dominant mason jar brand in Canada, is also part of Jarden, although it isn’t listed on Jarden’s primary website.
Jarden has branched out into other markets, selling goods ranging from paintbrushes to poker chips, so the company is not dependent on the popularity of home canning. The company is profitable, but growth has been shrinking recently, and at $39.13 per share, the stock isn’t that far from its 52-week high of $41.14. Jarden stock, which pays a 0.9% dividend, sank to $25.88 last summer, which is the kind of price I prefer. The company’s debt to equity is higher than I like, but it’s understandable since Jarden is an old-school manufacturer. A decent cash balance partially offsets the debt level. Current P/E is high at 16.9, but forward P/E is closer to 8.5, so valuation is reasonable.
Jarden is a fine company in a solid niche with a reasonable multiple; that said, I would watch the stock and look to buy on a pullback.