Masco Corporation (NYSE: MAS) and Fortune Brands Home & Security (NYSE:FBHS) are both mid-cap construction companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, profitability, risk, valuation and earnings.

Institutional & Insider Ownership

88.4% of Masco Corporation shares are owned by institutional investors. Comparatively, 88.1% of Fortune Brands Home & Security shares are owned by institutional investors. 1.3% of Masco Corporation shares are owned by insiders. Comparatively, 1.6% of Fortune Brands Home & Security shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility & Risk

Masco Corporation has a beta of 1.54, suggesting that its stock price is 54% more volatile than the S&P 500. Comparatively, Fortune Brands Home & Security has a beta of 1.37, suggesting that its stock price is 37% more volatile than the S&P 500.

Dividends

Masco Corporation pays an annual dividend of $0.40 per share and has a dividend yield of 1.1%. Fortune Brands Home & Security pays an annual dividend of $0.72 per share and has a dividend yield of 1.1%. Masco Corporation pays out 24.7% of its earnings in the form of a dividend. Fortune Brands Home & Security pays out 25.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Masco Corporation has increased its dividend for 3 consecutive years and Fortune Brands Home & Security has increased its dividend for 3 consecutive years.

Earnings and Valuation

This table compares Masco Corporation and Fortune Brands Home & Security’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Masco Corporation $7.47 billion 1.58 $1.23 billion $1.62 23.16
Fortune Brands Home & Security $5.13 billion 1.95 $822.40 million $2.84 22.85

Masco Corporation has higher revenue and earnings than Fortune Brands Home & Security. Fortune Brands Home & Security is trading at a lower price-to-earnings ratio than Masco Corporation, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Masco Corporation and Fortune Brands Home & Security’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Masco Corporation 7.09% 20,509.09% 10.67%
Fortune Brands Home & Security 8.61% 18.93% 8.88%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Masco Corporation and Fortune Brands Home & Security, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Masco Corporation 0 2 13 0 2.87
Fortune Brands Home & Security 0 6 9 0 2.60

Masco Corporation currently has a consensus target price of $40.77, indicating a potential upside of 8.66%. Fortune Brands Home & Security has a consensus target price of $68.17, indicating a potential upside of 5.05%. Given Masco Corporation’s stronger consensus rating and higher probable upside, research analysts clearly believe Masco Corporation is more favorable than Fortune Brands Home & Security.

Summary

Masco Corporation beats Fortune Brands Home & Security on 10 of the 16 factors compared between the two stocks.

About Masco Corporation

Masco Corporation designs, manufactures, markets and distributes branded home improvement and building products. The Company operates through four business segments: Plumbing Products, Decorative Architectural Products, Cabinetry Products, and Windows and Other Specialty Products. The Company’s portfolio of brands includes BEHR paint; DELTA and HANSGROHE faucets, bath and shower fixtures; KRAFTMAID and MERILLAT cabinets; MILGARD windows and doors, and HOT SPRING spas. The Company’s plumbing products include faucets, showerheads, handheld showers, valves, bathing units, shower enclosures and toilets and are sold to home center retailers and to wholesalers and distributors. It also produces architectural coatings, including paints, primers, specialty paints, stains and waterproofing products. In North America, it manufactures and sells value-priced, stock and semi-custom assembled cabinetry for kitchen, bath, storage, home office and home entertainment applications.

About Fortune Brands Home & Security

Fortune Brands Home & Security, Inc. is a holding company. The Company operates through four segments. The Cabinets segment includes custom, semi-custom and stock cabinetry for the kitchen, bath and other parts of the home under brand names, including Aristokraft, Mid-Continent, Diamond, Kitchen Classics, Kitchen Craft, Schrock, Omega, Homecrest, Thomasville, StarMark and Ultracraft. The Plumbing segment manufactures or assembles and sells faucets, bath furnishings, accessories and kitchen sinks and waste disposals under the Moen, Riobel, ROHL, Perrin & Rowe, and Waste King brands. The Doors segment includes residential fiberglass and steel entry door systems under the Therma-Tru brand name and urethane millwork product lines under the Fypon brand name. The Security segment includes locks, safety and security devices and electronic security products under the Master Lock brand name and fire resistant safes, security containers and commercial cabinets under the SentrySafe brand name.

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