FORTUNE BRANDS HOME & SECURI (FBHS) Stock Fundamental Analysis

USA • New York Stock Exchange • NYSE:FBHS • US34964C1062

61.9 USD
-1.32 (-2.09%)
At close: Dec 14, 2022
61.9 USD
0 (0%)
After Hours: 12/14/2022, 8:04:00 PM
Fundamental Rating

5

Taking everything into account, FBHS scores 5 out of 10 in our fundamental rating. FBHS was compared to 42 industry peers in the Building Products industry. While FBHS is still in line with the averages on profitability rating, there are concerns on its financial health. FBHS has a decent growth rate and is not valued too expensively.


Dividend Valuation Growth Profitability Health

6

1. Profitability

1.1 Basic Checks

  • FBHS had positive earnings in the past year.
  • In the past year FBHS had a positive cash flow from operations.
FBHS Yearly Net Income VS EBIT VS OCF VS FCFFBHS Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 200M 400M 600M 800M 1B

1.2 Ratios

  • Looking at the Return On Assets, with a value of 8.94%, FBHS is in the better half of the industry, outperforming 62.22% of the companies in the same industry.
  • FBHS has a Return On Equity of 24.83%. This is in the better half of the industry: FBHS outperforms 66.67% of its industry peers.
  • Looking at the Return On Invested Capital, with a value of 13.77%, FBHS is in the better half of the industry, outperforming 62.22% of the companies in the same industry.
  • FBHS had an Average Return On Invested Capital over the past 3 years of 48.97%. This is significantly above the industry average of 12.68%.
  • The last Return On Invested Capital (13.77%) for FBHS is well below the 3 year average (48.97%), which needs to be investigated, but indicates that FBHS had better years and this may not be a problem.
Industry RankSector Rank
ROA 8.94%
ROE 24.83%
ROIC 13.77%
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)48.97%
ROIC(5y)N/A
FBHS Yearly ROA, ROE, ROICFBHS Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 5 10 15 20 25

1.3 Margins

  • FBHS has a Profit Margin of 9.35%. This is in the better half of the industry: FBHS outperforms 62.22% of its industry peers.
  • In the last couple of years the Profit Margin of FBHS has grown nicely.
  • The Operating Margin of FBHS (14.17%) is better than 62.22% of its industry peers.
  • FBHS's Operating Margin has improved in the last couple of years.
Industry RankSector Rank
OM 14.17%
PM (TTM) 9.35%
GM N/A
OM growth 3Y11.66%
OM growth 5Y6.4%
PM growth 3Y12.41%
PM growth 5Y4.01%
GM growth 3YN/A
GM growth 5YN/A
FBHS Yearly Profit, Operating, Gross MarginsFBHS Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 10 20 30

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3

2. Health

2.1 Basic Checks

  • FBHS has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
  • The number of shares outstanding for FBHS has been reduced compared to 1 year ago.
  • FBHS has a better debt/assets ratio than last year.
FBHS Yearly Shares OutstandingFBHS Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 50M 100M 150M
FBHS Yearly Total Debt VS Total AssetsFBHS Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2B 4B 6B

2.2 Solvency

  • An Altman-Z score of 2.97 indicates that FBHS is not a great score, but indicates only limited risk for bankruptcy at the moment.
  • The Altman-Z score of FBHS (2.97) is comparable to the rest of the industry.
  • FBHS has a debt to FCF ratio of 12.53. This is a negative value and a sign of low solvency as FBHS would need 12.53 years to pay back of all of its debts.
  • FBHS has a Debt to FCF ratio of 12.53. This is comparable to the rest of the industry: FBHS outperforms 44.44% of its industry peers.
  • A Debt/Equity ratio of 0.92 indicates that FBHS is somewhat dependend on debt financing.
  • Looking at the Debt to Equity ratio, with a value of 0.92, FBHS is doing worse than 68.89% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity 0.92
Debt/FCF 12.53
Altman-Z 2.97
ROIC/WACC1.52
WACC9.04%
FBHS Yearly LT Debt VS Equity VS FCFFBHS Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 1B 2B 3B

2.3 Liquidity

  • FBHS has a Current Ratio of 1.47. This is a normal value and indicates that FBHS is financially healthy and should not expect problems in meeting its short term obligations.
  • FBHS has a worse Current ratio (1.47) than 75.56% of its industry peers.
  • A Quick Ratio of 0.74 indicates that FBHS may have some problems paying its short term obligations.
  • FBHS's Quick ratio of 0.74 is on the low side compared to the rest of the industry. FBHS is outperformed by 84.44% of its industry peers.
Industry RankSector Rank
Current Ratio 1.47
Quick Ratio 0.74
FBHS Yearly Current Assets VS Current LiabilitesFBHS Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 500M 1B 1.5B 2B 2.5B

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4

3. Growth

3.1 Past

  • The Earnings Per Share has been growing slightly by 7.60% over the past year.
  • FBHS shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 16.07% yearly.
  • FBHS shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 9.41%.
  • The Revenue has been growing by 8.96% on average over the past years. This is quite good.
EPS 1Y (TTM)7.6%
EPS 3Y19.59%
EPS 5Y16.07%
EPS Q2Q%20.13%
Revenue 1Y (TTM)9.41%
Revenue growth 3Y11.76%
Revenue growth 5Y8.96%
Sales Q2Q%3.39%

3.2 Future

  • The Earnings Per Share is expected to grow by 1.11% on average over the next years.
  • FBHS is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -0.36% yearly.
EPS Next Y11.19%
EPS Next 2Y0.5%
EPS Next 3Y2.94%
EPS Next 5Y1.11%
Revenue Next Year5.43%
Revenue Next 2Y-0.08%
Revenue Next 3Y0.57%
Revenue Next 5Y-0.36%

3.3 Evolution

  • The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
  • When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
FBHS Yearly Revenue VS EstimatesFBHS Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2B 4B 6B 8B
FBHS Yearly EPS VS EstimatesFBHS Yearly EPS VS EstimatesYearly EPS VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2 4 6

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6

4. Valuation

4.1 Price/Earnings Ratio

  • A Price/Earnings ratio of 10.16 indicates a reasonable valuation of FBHS.
  • Based on the Price/Earnings ratio, FBHS is valued a bit cheaper than 73.33% of the companies in the same industry.
  • The average S&P500 Price/Earnings ratio is at 28.30. FBHS is valued rather cheaply when compared to this.
  • With a Price/Forward Earnings ratio of 10.70, the valuation of FBHS can be described as very reasonable.
  • 68.89% of the companies in the same industry are more expensive than FBHS, based on the Price/Forward Earnings ratio.
  • Compared to an average S&P500 Price/Forward Earnings ratio of 25.57, FBHS is valued rather cheaply.
Industry RankSector Rank
PE 10.16
Fwd PE 10.7
FBHS Price Earnings VS Forward Price EarningsFBHS Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 5 10 15 20 25

4.2 Price Multiples

  • The rest of the industry has a similar Enterprise Value to EBITDA ratio as FBHS.
  • FBHS's Price/Free Cash Flow ratio is in line with the industry average.
Industry RankSector Rank
P/FCF 29.36
EV/EBITDA 8.25
FBHS Per share dataFBHS EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 20 40 60

4.3 Compensation for Growth

  • FBHS's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
  • FBHS has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)0.91
PEG (5Y)0.63
EPS Next 2Y0.5%
EPS Next 3Y2.94%

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5

5. Dividend

5.1 Amount

  • FBHS has a Yearly Dividend Yield of 1.86%.
  • Compared to an average industry Dividend Yield of 0.68, FBHS pays a better dividend. On top of this FBHS pays more dividend than 86.67% of the companies listed in the same industry.
  • Compared to an average S&P500 Dividend Yield of 1.83, FBHS has a dividend comparable with the average S&P500 company.
Industry RankSector Rank
Dividend Yield 1.86%

5.2 History

  • The dividend of FBHS is nicely growing with an annual growth rate of 9.14%!
  • FBHS has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)9.14%
Div Incr YearsN/A
Div Non Decr YearsN/A
FBHS Yearly Dividends per shareFBHS Yearly Dividends per shareYearly Dividends per share 2016 2017 2018 2019 2020 2021 2022 0.2 0.4 0.6 0.8 1

5.3 Sustainability

  • 19.26% of the earnings are spent on dividend by FBHS. This is a low number and sustainable payout ratio.
  • The dividend of FBHS is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP19.26%
EPS Next 2Y0.5%
EPS Next 3Y2.94%
FBHS Yearly Income VS Free CF VS DividendFBHS Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2016 2017 2018 2019 2020 2021 200M 400M 600M
FBHS Dividend Payout.FBHS Dividend Payout, showing the Payout Ratio.FBHS Dividend Payout.PayoutRetained Earnings

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FORTUNE BRANDS HOME & SECURI / FBHS FAQ

What is the fundamental rating for FBHS stock?

ChartMill assigns a fundamental rating of 4 / 10 to FBHS.


Can you provide the valuation status for FORTUNE BRANDS HOME & SECURI?

ChartMill assigns a valuation rating of 6 / 10 to FORTUNE BRANDS HOME & SECURI (FBHS). This can be considered as Fairly Valued.


How profitable is FORTUNE BRANDS HOME & SECURI (FBHS) stock?

FORTUNE BRANDS HOME & SECURI (FBHS) has a profitability rating of 4 / 10.


What is the expected EPS growth for FORTUNE BRANDS HOME & SECURI (FBHS) stock?

The Earnings per Share (EPS) of FORTUNE BRANDS HOME & SECURI (FBHS) is expected to grow by 11.19% in the next year.


Is the dividend of FORTUNE BRANDS HOME & SECURI sustainable?

The dividend rating of FORTUNE BRANDS HOME & SECURI (FBHS) is 5 / 10 and the dividend payout ratio is 19.26%.