NYSE:FBHS

Stock Analysis Report

Fortune Brands Home & Security

Executive Summary

Fortune Brands Home & Security, Inc., together with its subsidiaries, provides home and security products for residential home repair, remodeling, new construction, and security applications.

Rewards

PE ratio (21.9x) is below the Building industry average (21.9x)

Earnings are forecast to grow 10.57% per year

Risk Analysis

Has a high level of debt



Snowflake Analysis

Mediocre balance sheet with questionable track record.


Similar Companies

Share Price & News

How has Fortune Brands Home & Security's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: FBHS has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

2.1%

FBHS

-0.1%

US Building

0.03%

US Market


1 Year Return

51.7%

FBHS

31.5%

US Building

18.6%

US Market

Return vs Industry: FBHS exceeded the US Building industry which returned 31.5% over the past year.

Return vs Market: FBHS exceeded the US Market which returned 18.6% over the past year.


Shareholder returns

FBHSIndustryMarket
7 Day2.1%-0.1%0.03%
30 Day4.1%1.1%1.7%
90 Day23.9%9.2%5.7%
1 Year54.3%51.7%33.6%31.5%21.1%18.6%
3 Year19.7%14.6%23.7%17.8%45.6%36.2%
5 Year56.8%46.8%60.0%39.6%71.1%52.3%

Price Volatility Vs. Market

How volatile is Fortune Brands Home & Security's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Fortune Brands Home & Security undervalued compared to its fair value and its price relative to the market?

21.94x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: FBHS ($64.6) is trading above our estimate of fair value ($63.98)

Significantly Below Fair Value: FBHS is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: FBHS is good value based on its PE Ratio (21.9x) compared to the Building industry average (21.9x).

PE vs Market: FBHS is poor value based on its PE Ratio (21.9x) compared to the US market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: FBHS is poor value based on its PEG Ratio (2.1x)


Price to Book Ratio

PB vs Industry: FBHS is overvalued based on its PB Ratio (3.8x) compared to the US Building industry average (2.5x).


Next Steps

Future Growth

How is Fortune Brands Home & Security forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?

10.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: FBHS's forecast earnings growth (10.6% per year) is above the savings rate (1.7%).

Earnings vs Market: FBHS's earnings (10.6% per year) are forecast to grow slower than the US market (14.2% per year).

High Growth Earnings: FBHS's earnings are forecast to grow, but not significantly.

Revenue vs Market: FBHS's revenue (3.3% per year) is forecast to grow slower than the US market (7.4% per year).

High Growth Revenue: FBHS's revenue (3.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: FBHS's Return on Equity is forecast to be high in 3 years time (20.4%)


Next Steps

Past Performance

How has Fortune Brands Home & Security performed over the past 5 years?

10.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: FBHS has high quality earnings.

Growing Profit Margin: FBHS's current net profit margins (7.2%) are lower than last year (7.9%).


Past Earnings Growth Analysis

Earnings Trend: FBHS's earnings have grown by 10.3% per year over the past 5 years.

Accelerating Growth: FBHS's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: FBHS had negative earnings growth (-4.5%) over the past year, making it difficult to compare to the Building industry average (-5.5%).


Return on Equity

High ROE: FBHS's Return on Equity (17.7%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Fortune Brands Home & Security's financial position?


Financial Position Analysis

Short Term Liabilities: FBHS's short term assets ($1.9B) exceed its short term liabilities ($1.4B).

Long Term Liabilities: FBHS's short term assets ($1.9B) do not cover its long term liabilities ($2.6B).


Debt to Equity History and Analysis

Debt Level: FBHS's debt to equity ratio (100.5%) is considered high.

Reducing Debt: FBHS's debt to equity ratio has increased from 29.2% to 100.5% over the past 5 years.

Debt Coverage: FBHS's debt is well covered by operating cash flow (26.1%).

Interest Coverage: FBHS's interest payments on its debt are well covered by EBIT (7.8x coverage).


Balance Sheet

Inventory Level: FBHS has a high level of physical assets or inventory.

Debt Coverage by Assets: FBHS's debt is not covered by short term assets (assets are 0.8x debt).


Next Steps

Dividend

What is Fortune Brands Home & Security's current dividend yield, its reliability and sustainability?

1.36%

Current Dividend Yield


Dividend Yield vs Market

company1.4%marketbottom25%1.4%markettop25%3.7%industryaverage1.7%forecastin3Years1.5%

Current dividend yield vs market & industry

Notable Dividend: FBHS's dividend (1.36%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.42%).

High Dividend: FBHS's dividend (1.36%) is low compared to the top 25% of dividend payers in the US market (3.7%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, FBHS has been paying a dividend for less than 10 years.

Growing Dividend: FBHS's dividend payments have increased, but the company has only paid a dividend for 7 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (29.2%), FBHS's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: FBHS's dividends in 3 years are forecast to be well covered by earnings (24.6% payout ratio).


Next Steps

Management

What is the CEO of Fortune Brands Home & Security's salary, the management and board of directors tenure and is there insider trading?

3.0yrs

Average management tenure


CEO

Chris Klein (55yo)

9.9yrs

Tenure

US$8,611,331

Compensation

Mr. Christopher J. Klein, also known as Chris, has been the Chief Executive Officer of Fortune Brands Home & Security, Inc. since January 1, 2010. Mr. Klein served as the President and Chief Operating Offi ...


CEO Compensation Analysis

Compensation vs Market: Chris's total compensation ($USD8.61M) is about average for companies of similar size in the US market ($USD6.81M).

Compensation vs Earnings: Chris's compensation has been consistent with company performance over the past year.


Management Age and Tenure

3.0yrs

Average Tenure

53yo

Average Age

Experienced Management: FBHS's management team is considered experienced (3 years average tenure).


Board Age and Tenure

8.3yrs

Average Tenure

62.5yo

Average Age

Experienced Board: FBHS's board of directors are considered experienced (8.3 years average tenure).


Insider Trading

Insider Buying: FBHS insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$6,145,32218 Nov 19
Christopher Klein
EntityIndividual
Role
Chief Executive Officer
CEO & Director
Shares97,439
Max PriceUS$63.07
SellUS$149,97015 Nov 19
Ann Hackett
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares2,387
Max PriceUS$62.83
SellUS$725,78428 Oct 19
David Randich
EntityIndividual
Shares11,906
Max PriceUS$60.96
SellUS$504,04406 Aug 19
Allan MacKay
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares10,000
Max PriceUS$50.40
SellUS$115,18701 May 19
Brian Lantz
EntityIndividual
Role
Chief Administrative Officer
Senior Vice President of Communications & Corporate Administration
Shares2,192
Max PriceUS$52.55
SellUS$1,060,00030 Apr 19
David Randich
EntityIndividual
Shares20,000
Max PriceUS$53.00
SellUS$93,92413 Feb 19
Danny Luburic
EntityIndividual
Shares2,000
Max PriceUS$46.96

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Chris Klein (55yo)

    CEO & Director

    • Tenure: 9.9yrs
    • Compensation: US$8.61m
  • Bob Biggart (65yo)

    Senior VP

    • Tenure: 6yrs
    • Compensation: US$1.94m
  • Mark-Hans Richer (52yo)

    Chief Marketing & Innovation Officer and Senior VP of The Fortune Brands Global Plumbing Group

    • Tenure: 2.7yrs
  • Sheri Grissom (55yo)

    Senior Vice President of Human Resources

    • Tenure: 4.8yrs
  • Brian Lantz (56yo)

    Senior Vice President of Communications & Corporate Administration

    • Tenure: 2.9yrs
  • Brett Finley (48yo)

    President of Doors & Security Segment

    • Tenure: 3.8yrs
    • Compensation: US$2.34m
  • Nick Fink (44yo)

    President & COO

    • Tenure: 0.8yrs
    • Compensation: US$2.58m
  • Tracey Belcourt (53yo)

    Senior Vice President of Global Growth & Development

    • Tenure: 3yrs
  • Pat Hallinan (51yo)

    Senior VP & CFO

    • Tenure: 2.4yrs
    • Compensation: US$2.29m
  • Kaveh Bakhtiari

    Director of Investor Relations

    • Tenure: 0yrs

Board Members

  • David MacKay (63yo)

    Independent Director

    • Tenure: 8.3yrs
    • Compensation: US$241.62k
  • John Morikis (56yo)

    Independent Director

    • Tenure: 8yrs
    • Compensation: US$240.84k
  • Ronald Waters (67yo)

    Independent Director

    • Tenure: 8.3yrs
    • Compensation: US$250.11k
  • Ann Hackett (65yo)

    Independent Director

    • Tenure: 8.3yrs
    • Compensation: US$254.12k
  • David Thomas (70yo)

    Non-Executive Chairman & Lead Director

    • Tenure: 8.3yrs
    • Compensation: US$455.11k
  • Susan Kilsby (61yo)

    Independent Director

    • Tenure: 4.4yrs
    • Compensation: US$233.64k
  • Irial Finan (62yo)

    Independent Director

    • Tenure: 0.8yrs
  • Chris Klein (55yo)

    CEO & Director

    • Tenure: 9.9yrs
    • Compensation: US$8.61m

Company Information

Fortune Brands Home & Security, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Fortune Brands Home & Security, Inc.
  • Ticker: FBHS
  • Exchange: NYSE
  • Founded: 1988
  • Industry: Building Products
  • Sector: Capital Goods
  • Market Cap: US$8.659b
  • Shares outstanding: 139.15m
  • Website: https://www.fbhs.com

Number of Employees


Location

  • Fortune Brands Home & Security, Inc.
  • 520 Lake Cook Road
  • Deerfield
  • Illinois
  • 60015
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
FBHSNYSE (New York Stock Exchange)YesCommon SharesUSUSDSep 2011
2FBDB (Deutsche Boerse AG)YesCommon SharesDEEURSep 2011
0IRNLSE (London Stock Exchange)YesCommon SharesGBUSDSep 2011

Biography

Fortune Brands Home & Security, Inc., together with its subsidiaries, provides home and security products for residential home repair, remodeling, new construction, and security applications. It operates i ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/08 00:15
End of Day Share Price2019/12/06 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.