How Smart Investors Look at Masco (MAS).

Masco logged a 0.2% change during today's morning session, and is now trading at a price of $49.82 per share. The S&P 500 index moved 0.0% and the Nasdaq posted a -0.0% change.

Masco shares moved -4.3% over the last 52 weeks, with a high of $58.18 and a low of $42.33. During this time, the stock outperformed the S&P 500 index by 6.0%. As of January 2022, the company's 50-day average price is $52.0. Masco Corporation designs, manufactures, and distributes home improvement and building products in North America, Europe, and internationally. The large-cap Industrials company has 19,000 full time employees and is based in Livonia, MI. Masco has returned a 2.3% dividend yield over the last 12 months.

Exceptional EPS Growth with Healthy Leverage Levels:

2019-12-31 2020-12-31 2021-12-31 2022-12-31
Revenue (MM) $6,707 $7,188 $8,375 $8,680
Revenue Growth n/a 7.17% 16.51% 3.64%
Gross Margins 35.4% 36.0% 34.2% 31.3%
Gross Margins Growth n/a 1.69% -5.0% -8.48%
Operating Margins 16.4% 18.0% 17.3% 15.2%
Operating Margins Growth n/a 9.76% -3.89% -12.14%
Net Margins 13.94% 17.03% 4.87% 9.75%
Net Margins Growth n/a 22.17% -71.4% 100.21%
Earnings Per Share $3.22 $4.59 $1.62 $3.73
EPS Growth n/a 42.55% -64.71% 130.25%
Diluted Shares (MM) 288 264 251 225
Free Cash Flow (MM) $671 $839 $802 $616
FCF Growth n/a 25.04% -4.41% -23.19%
Capital Expenditures (MM) -$162 -$114 -$128 -$224
Net Debt / EBITDA 1.68 1.05 1.7 1.86

Masco Is Currently Fairly Valued:

Compared to the Industrials sector's average of 20.49, Masco has a trailing twelve month P/E ratio of 13.4 and, according to its EPS guidance of 3.71, an expected P/E ratio of 13.4. Masco's PEG ratio is 0.5 based on its 26.75% annual average growth rate of historical and projected earnings per share. However, we believe that it is more prudent to calculate the PEG ratio using the broader market's 5-year expected EPS growth rate of 13.05%, because the growth rate implied by Masco's past and expected EPS is probably not sustainable. This more prudent approach shows a PEG ratio of 1.02, which implies that the company's shares might in fact be fairly valued.

Masco's elevated P/B ratio notwithstanding, the company's strong cash flows, decent earnings multiple, and healthy debt levels factor towards it being fairly valued.

Masco Is the Subject of Mixed Market Indicators:

15 analysts are following Masco and have set target prices ranging from $45.0 to $70.0 per share. On average, they have given the company a rating of hold. At the current price of $49.82, MAS is trading -13.4% away from its average analyst target price of $57.53 per share, implying an analyst consensus of some upside potential for the stock.

The company has an average amount of shares sold short since 3.2% of the company's shares are tied to short positions. Institutions own 99.3% of Masco's shares, while the insider ownership rate stands at 0.32%. The biggest shareholder is the Vanguard Group, Inc. with a 11% stake in the company worth approximately $1,234,183,777.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.