Fortune Brands Home & Security (NYSE: FBHS) and Apogee Enterprises (NASDAQ:APOG) are both industrial products companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, risk, dividends and earnings.

Risk and Volatility

Fortune Brands Home & Security has a beta of 1.37, suggesting that its share price is 37% more volatile than the S&P 500. Comparatively, Apogee Enterprises has a beta of 1.56, suggesting that its share price is 56% more volatile than the S&P 500.

Dividends

Fortune Brands Home & Security pays an annual dividend of $0.72 per share and has a dividend yield of 1.1%. Apogee Enterprises pays an annual dividend of $0.56 per share and has a dividend yield of 1.1%. Fortune Brands Home & Security pays out 25.4% of its earnings in the form of a dividend. Apogee Enterprises pays out 20.4% 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. Apogee Enterprises has increased its dividend for 3 consecutive years. Apogee Enterprises is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Fortune Brands Home & Security and Apogee Enterprises, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fortune Brands Home & Security 0 6 8 0 2.57
Apogee Enterprises 0 0 3 0 3.00

Fortune Brands Home & Security presently has a consensus target price of $68.00, suggesting a potential upside of 0.47%. Apogee Enterprises has a consensus target price of $63.33, suggesting a potential upside of 28.83%. Given Apogee Enterprises’ stronger consensus rating and higher possible upside, analysts clearly believe Apogee Enterprises is more favorable than Fortune Brands Home & Security.

Valuation and Earnings

This table compares Fortune Brands Home & Security and Apogee Enterprises’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Fortune Brands Home & Security $5.13 billion 2.03 $822.40 million $2.84 23.83
Apogee Enterprises $1.20 billion 1.18 $159.52 million $2.74 17.94

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

Profitability

This table compares Fortune Brands Home & Security and Apogee Enterprises’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fortune Brands Home & Security 8.61% 18.93% 8.88%
Apogee Enterprises 6.57% 17.89% 10.27%

Institutional & Insider Ownership

88.1% of Fortune Brands Home & Security shares are owned by institutional investors. 1.6% of Fortune Brands Home & Security shares are owned by insiders. Comparatively, 3.1% of Apogee Enterprises shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Fortune Brands Home & Security beats Apogee Enterprises on 9 of the 17 factors compared between the two stocks.

Fortune Brands Home & Security Company Profile

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.

Apogee Enterprises Company Profile

Apogee Enterprises, Inc. is engaged in the design and development of glass solutions for enclosing commercial buildings and framing art. The Company operates through four segments: Architectural Glass, Architectural Services, Architectural Framing Systems and Large-Scale Optical Technologies (LSO). The Architectural Glass segment fabricates coated glass used in customized window and wall systems. The Architectural Services segment designs, engineers, fabricates and installs the walls of glass, windows and other curtainwall products making up the outside skin of commercial and institutional buildings. The Architectural Framing Systems segment designs, engineers, fabricates and finishes the aluminum frames used in customized aluminum and glass window, curtainwall, storefront and entrance systems. The Large-Scale Optical Technologies segment manufactures glass and acrylic products for the custom picture framing and fine art markets.

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