Stock Analysis

Should You Think About Buying Masco Corporation (NYSE:MAS) Now?

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NYSE:MAS
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Masco Corporation (NYSE:MAS) saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Let’s examine Masco’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Our analysis indicates that MAS is potentially undervalued!

Is Masco Still Cheap?

Great news for investors – Masco is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is $64.16, but it is currently trading at US$49.41 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Masco’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What does the future of Masco look like?

earnings-and-revenue-growth
NYSE:MAS Earnings and Revenue Growth December 6th 2022

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Though in the case of Masco, it is expected to deliver a relatively unexciting earnings growth of 8.7%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.

What This Means For You

Are you a shareholder? Even though growth is relatively muted, since MAS is currently undervalued, it may be a great time to increase your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on MAS for a while, now might be the time to make a leap. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy MAS. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. To help with this, we've discovered 3 warning signs (1 shouldn't be ignored!) that you ought to be aware of before buying any shares in Masco.

If you are no longer interested in Masco, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

What are the risks and opportunities for Masco?

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

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Rewards

  • Trading at 0.6% below our estimate of its fair value

  • Earnings are forecast to grow 4.52% per year

  • Earnings grew by 87.2% over the past year

Risks

  • Negative shareholders equity

  • Significant insider selling over the past 3 months

  • Has a high level of debt

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1Y Return

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