company background image
MAS

Masco NYSE:MAS Stock Report

Last Price

US$55.58

Market Cap

US$12.5b

7D

5.4%

1Y

-11.2%

Updated

12 Aug, 2022

Data

Company Financials +
MAS fundamental analysis
Snowflake Score
Valuation5/6
Future Growth2/6
Past Performance5/6
Financial Health2/6
Dividends5/6

MAS Stock Overview

Masco Corporation designs, manufactures, and distributes home improvement and building products in North America, Europe, and internationally.

Masco Corporation Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Masco
Historical stock prices
Current Share PriceUS$55.58
52 Week HighUS$71.06
52 Week LowUS$46.27
Beta1.23
1 Month Change4.51%
3 Month Change0.38%
1 Year Change-11.21%
3 Year Change44.51%
5 Year Change52.69%
Change since IPO344.64%

Recent News & Updates

Aug 09

Masco: Low Valuation, Margin Improvement Prospects, And Structural Tailwinds

Masco's volume should be impacted due to a moderation in demand but pricing should help offset this decline. Margins should improve from the reduction in input cost inflation and easing of supply chain constraints. MAS stock's valuation looks attractive. Investment Thesis Masco Corporation (MAS) looks cheap trading at 12.72x FY22 consensus EPS estimates. While investors are worried about the housing slowdown, the repair and remodel category is comparatively less cyclical. The consumer balance sheet is also much stronger than pre-pandemic levels which should provide downside support. While some categories such as DIY paint, faucets, showers, and hardware lighting have started moderating from mid-Q2 FY22, demand for other categories, such as pro paint and spa, remained healthy. This should impact the volume growth of the company to some extent, but the higher net selling price from price hikes that the company implemented to offset inflation, should support the sales growth in 2H FY22. Additionally, structural tailwinds such as higher home equity and aging homes should benefit the repair and remodel business of the company in the long term. The margins of the company should be impacted in Q3 FY22 due to inflation but should improve in Q4 and beyond due to easier comps and price hike benefits. Masco's Q2 FY22 Earnings Masco recently reported its second quarter FY22 financial results that were lower than the consensus estimates. The net sales in the quarter grew 8% Y/Y to $2.35 bn (vs. the consensus estimate of $2.37 bn), whereas the adjusted EPS remained flat Y/Y at $1.14 (vs. the consensus estimate of $1.20). Higher net selling prices and volumes increased sales by 10% and 1%, partially offset by an unfavorable currency impact of 3%. The adjusted operating margin in the quarter declined 250 bps Y/Y to 17.6% due to higher supply chain costs, marketing spending, and unfavorable currency translation, partially offset by higher net selling prices and incremental volume. However, the EPS growth remained flat Y/Y due to a lower share count. Some Revenue Headwinds But It's Not That Bad The net sales in the North American region increased 11% Y/Y, excluding the impact of currency, as the sales growth in the DIY and pro paints business remained strong along with growth in spas, faucets, and showers businesses. The strong growth was driven by increased net selling prices and higher sales volume, contributing 10% and 1% to the total region's sales, respectively. International sales grew 8% Y/Y or 11%, excluding the divestiture of the Huppe business in Q2 FY21, driven by net selling prices and higher volumes, contributing 7% and 4% to the total sales, respectively. The company was able to deliver a solid performance in China despite the lockdown impacting its sales in the quarter. Chinese sales were helped by good execution, focusing on the higher-end segment with less volatility, and selling into project businesses or hotels, multifamily, etc., which saw a jump right after the lockdown got lifted. The plumbing segment grew 7% in local currency against a comp of 48% in Q2 FY21. The sales grew 8% Y/Y, excluding the impact of currency, acquisitions, and divestitures, with pricing contributing 7% and volumes contributing 1%. Sales in North America grew 7% in local currency due to strength in the Watkins Wellness brand and growth in the Delta business against a double-digit comp. International plumbing sales increased 8% in local currency, or 11% excluding divestiture, as the Hansgrohe business grew in almost all its markets including Germany, China, France, and the U.K. Decorative Architectural segment sales increased 15% Y/Y in the quarter, with the pro paint business delivering 40% growth and the DIY paint business growing in the low teens. The DIY sales growth was predominantly due to increased pricing as the volume growth remained flat. The flattish volume growth was better than its peers, such as Sherwin-Williams (SHW), which had a low single-digit decline in DIY sales. Looking forward, the plumbing segment is experiencing a healthy demand for its products and the backlog for big-ticket items is high. The backlog for the spa business was around 25 weeks at the end of the second quarter of FY22. Also, the company's Hansgrohe business, which generates a majority of its revenue from project sales in Asia and the Middle East, should support the revenue growth even when the consumer market turns down as these projects need to be finished. Within the Decorative Architectural segment, specifically in the paint, the pro-business should be facing tougher comps in Q3 FY22 as the growth in Q3 FY21 was ~45%. However, pro-business demand is still strong, which should support revenue growth in 2H FY22, though not at the same rate as the previous three to four quarters. The DIY business should be driven primarily by prices in 2H FY22. While some categories such as pro paint and spa are experiencing a healthy demand, the company experienced some moderation in the demand trend across certain product categories such as DIY paint, faucets and showers, and hardware lighting from mid-Q2 FY22 and the demand trend has remained flat since then. Additionally, the comps in Q3 are difficult for the plumbing and decorative segments. Therefore, the volumes should be flat to down modestly in 2H FY22 with pricing more than offsetting its impact. LIRA index (Joint Centre of Housing Studies (Harvard), GS Analytics Research) While many investors are worried about the company's outlook beyond FY22 due to the downturn in the housing market, I believe the company's business will prove more resilient than what investors are giving it credit for. Masco generates ~90% of its revenue from the repair and remodel industry channels, which is less cyclical compared to new housing construction. Additionally, the LIRA index (Leading Indicator of Remodeling Activity) shows that the Y/Y remodeling expenditure is expected to remain strong for the next four quarters. Further, consumers and homeowners have strong balance sheets with more than $2 trillion in excess savings vs. pre-pandemic levels and home equity values that are at an all-time high. These structural factors should provide tailwinds to the company's repair and remodel business in 2H FY22 and beyond offsetting some of the macroeconomic headwinds. The pricing actions taken by the company to offset the inflationary cost pressures are benefiting the company's sales growth and should continue to benefit moving forward even if the volume growth moderates due to a slowdown in the economy. The company has lowered its full-year sales growth for FY22 from 6% to 10% of its previous guidance range to its new range of 5% to 7% due to the moderation in demand and foreign currency headwinds. The plumbing segment is expected to be in the range of 3% to 5%, including the impact of unfavorable currency translation by 3% or $165 mn. The decorative architectural segment is expected to grow in the range of 9% to 11% with mid-single-digit growth in DIY paint sales and strong double-digit sales growth in pro paint. Margins The margins of the company were impacted due to higher Y/Y commodity and logistics costs in Q2 FY22. A 5% increase in inflation impacts the margin by 100 bps, and in Q2 FY22, the company faced mid-teen inflation, which compressed its margins. I believe commodity and other inflation have reached peak level as the company is seeing declines in certain input costs in the spot market. The costs of copper and zinc, which get into the plumbing products have begun to decrease. The impact of these cost decreases takes approximately six months to flow through the company's financials. So, the positive impact of the decline in some of the commodity prices should be reflected in the late Q4 22 and beyond. Ocean freight has also begun to moderate, which should benefit the margin growth, partially offset by the higher over-the-road trucking costs (freight costs). The company plans to take additional price hikes if necessary to offset the headwinds related to inflation.

Jul 28

Masco Non-GAAP EPS of $1.14 misses by $0.04, revenue of $2.35B misses by $10M, updates earning guidance

Masco press release (NYSE:MAS): Q2 Non-GAAP EPS of $1.14 misses by $0.04. Revenue of $2.35B (+7.8% Y/Y) misses by $10M. Anticipate 2022 earnings per share in the range of $4.19 - $4.29 per share, and on an adjusted basis, in the range of $4.15 - $4.25 per share vs consensus of $4.22, narrowed from the previous range of $4.15 - $4.35 per share

Jul 17
An Intrinsic Calculation For Masco Corporation (NYSE:MAS) Suggests It's 45% Undervalued

An Intrinsic Calculation For Masco Corporation (NYSE:MAS) Suggests It's 45% Undervalued

Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Masco Corporation...

Shareholder Returns

MASUS BuildingUS Market
7D5.4%2.5%1.3%
1Y-11.2%-17.1%-11.7%

Return vs Industry: MAS exceeded the US Building industry which returned -17.1% over the past year.

Return vs Market: MAS matched the US Market which returned -11.7% over the past year.

Price Volatility

Is MAS's price volatile compared to industry and market?
MAS volatility
MAS Average Weekly Movement4.7%
Building Industry Average Movement6.2%
Market Average Movement7.8%
10% most volatile stocks in US Market16.9%
10% least volatile stocks in US Market3.2%

Stable Share Price: MAS is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: MAS's weekly volatility (5%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
192920,000Keith Allmanhttps://masco.com

Masco Corporation designs, manufactures, and distributes home improvement and building products in North America, Europe, and internationally. The company’s Plumbing Products segment offers faucets, showerheads, handheld showers, valves, bath hardware and accessories, bathing units, shower bases and enclosures, sinks, toilets, acrylic tubs, shower trays, spas, exercise pools, and fitness systems; brass, copper, and composite plumbing system components; connected water products; thermoplastic solutions, extruded plastic profiles, specialized fabrications, and PEX tubing products; and other non-decorative plumbing products. This segment provides its products under the DELTA, BRIZO, PEERLESS, HANSGROHE, AXOR, KRAUS, EASY DRAIN, STEAMIST, ELITESTEAM, GINGER, NEWPORT BRASS, BRASSTECH, WALTEC, BRISTAN, HERITAGE, MIROLIN, HOT SPRING, CALDERA, FREEFLOW SPAS, FANTASY SPAS, ENDLESS POOLS, BRASSCRAFT, PLUMB SHOP, COBRA, COBRA PRO, and MASTER PLUMBER brands.

Masco Corporation Fundamentals Summary

How do Masco's earnings and revenue compare to its market cap?
MAS fundamental statistics
Market CapUS$12.53b
Earnings (TTM)US$863.00m
Revenue (TTM)US$8.78b

14.5x

P/E Ratio

1.4x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
MAS income statement (TTM)
RevenueUS$8.78b
Cost of RevenueUS$5.93b
Gross ProfitUS$2.85b
Other ExpensesUS$1.98b
EarningsUS$863.00m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)3.83
Gross Margin32.41%
Net Profit Margin9.83%
Debt/Equity Ratio-638.4%

How did MAS perform over the long term?

See historical performance and comparison

Dividends

2.0%

Current Dividend Yield

30%

Payout Ratio