Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Here's Why You Should Consider Betting on Fortune Brands (FBHS)

By Zacks Investment ResearchStock MarketsDec 10, 2020 10:40PM ET
www.investing.com/analysis/heres-why-you-should-consider-betting-on-fortune-brands-fbhs-200547614
Here's Why You Should Consider Betting on Fortune Brands (FBHS)
By Zacks Investment Research   |  Dec 10, 2020 10:40PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Fortune Brands (NYSE:FBHS) Home & Security, Inc. FBHS currently boasts robust growth prospects on strength in its businesses, solid product portfolio, investments in product innovation and a sound capital-deployment strategy.

The Zacks Rank #2 (Buy) company has a market capitalization of $11.7 billion. In the past six months, it has gained 44.6% compared with the industry’s growth of 24.5%.



Let’s delve onto the factors that make investment in the company a smart choice at the moment.

Business Strength: Fortune Brands is poised to benefit from the strength in the U.S. housing market, supported by expected new construction growth and product launches. Going forward, solid momentum across the company’s plumbing business, driven by a strong suite of brands and success of its category and channel expansion strategies will drive its top-line performance. Moreover, strong demand for doors and decking products, along with strength in its security business, is likely to be a tailwind.

Also, it has been gaining from strength in its Fiberon business (acquired in September 2018). The business is complementing its existing door brand — Therma-Tru — and enhancing growth opportunities in the outdoor living space. Further, the company’s investment in capacity and product line expansion in security, and the Fiberon businesses bode well. Notably, Fiberon decking brand grew more than 40%, in the third quarter of 2020.

Sound Capital Allocation Strategies: In September 2020, the company’s board of directors approved a $500-million share repurchase plan. The buyback program is valid till Sep 21, 2022. It’s worth mentioning here that in the first nine months of 2020, it repurchased shares worth $150 million (no repurchasing activities were made in the second and third quarters) and paid out dividends worth $99.9 million. Also, in December 2020, it announced an 8% hike in its quarterly dividend rate.

Initiatives: Fortune Brands’ focus on supply-chain optimization, operational efficiency, cost-control measures and other initiatives have been in driving its profitability and aiding it to maintain a healthy margin performance. For instance, in the third quarter, its operating margin climbed 90 basis points on a year-over-year basis to 14.8%.

In the past 60 days, the Zacks Consensus Estimate for its 2020 earnings has trended up from $3.85 to $4.09 on seven upward estimate revisions against none downward.

Other Key Picks

Some other top-ranked stocks from the same space are Allegion (NYSE:ALLE) plc ALLE, Brady (NYSE:BRC) Corporation BRC and Resideo Technologies (NYSE:REZI), Inc. REZI, each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Allegion delivered a positive earnings surprise of 17.48%, on average, in the trailing four quarters.

Brady delivered a positive earnings surprise of 2.95%, on average, in the trailing four quarters.

Resideo delivered a positive earnings surprise of 212.23%, on average, in the trailing four quarters.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.

See the pot stocks we're targeting >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Fortune Brands Home & Security, Inc. (FBHS): Free Stock Analysis Report

Brady Corporation (BRC): Free Stock Analysis Report

Allegion PLC (ALLE): Free Stock Analysis Report

Resideo Technologies, Inc. (REZI): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research
Here's Why You Should Consider Betting on Fortune Brands (FBHS)
 

Related Articles

Craig Erlam
A Disappointing End To The Week By Craig Erlam - Jul 30, 2021 1

Stock markets have turned negative on the final trading day of the week, with Europe tracking Asia lower and U.S. markets expected to follow. Whether this is the start of a late...

Here's Why You Should Consider Betting on Fortune Brands (FBHS)

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email