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Here's Why it is Worth Investing in Fortune Brands (FBHS) Now
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Fortune Brands Home Security, Inc. currently boasts strong growth prospects on strength in its end markets, solid product portfolio, acquired assets and a sound capital-deployment strategy.
Notably, the Zacks Rank #1 (Strong Buy) company has a market capitalization of $11 billion. In the past six months, it has gained 10.3% against the industry’s decline of 0.7%.
Let’s delve onto the factors that make investment in the company a smart choice at the moment.
Solid End Markets: Fortune Brands has been experiencing strength across its plumbing business, backed by the success of its category and channel expansion strategies. Also, solid demand for decking products along with strength in its doors as well as security businesses supported by product launches is likely to continue supporting revenues of its Doors & Security segment. In addition, the growing popularity of the company’s value price point cabinetry products bodes well for its Cabinets segment.
Acquisition Benefits: Its buyout of Fiberon (September 2018) complements Fortune Brands' existing door brand — Therma-Tru — and enhances its growth opportunities in the outdoor living space. Notably, it invested in capacity and product line expansion in the security business, and the acquired Fiberon business. Its Fiberon decking brand grew in the mid-teens range in the second quarter of 2020.
Rewards to Shareholders: It remains committed to rewarding shareholders through share-buyback programs and dividend payouts apart from using its fund for acquiring lucrative businesses. In the first half of 2020, the company repurchased shares worth $150 million and paid out dividends worth $66.6 million. Also, in December 2019, it announced a 9% hike in its quarterly dividend rate.
Initiatives: The company’s focus on supply-chain optimization, manufacturing footprint optimization and other initiatives are likely to continue to improve margins and its financial performance in 2020. Also, several cost-control measures implemented by it including the reduction of operating expenses and non-essential capital expenditure will continue to help it maintain a healthy margin performance amid the coronavirus crisis.
In the past 30 days, the Zacks Consensus Estimate for its 2020 earnings has trended up from $2.98 to $3.80 on seven upward estimate revisions against none downward.
Astec delivered an earnings surprise of 124.31%, on average, in the trailing four quarters.
AptarGroup delivered an earnings surprise of 5.62%, on average, in the trailing four quarters.
Casella Waste Systems delivered an earnings surprise of 158.08%, on average, in the trailing four quarters.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Here's Why it is Worth Investing in Fortune Brands (FBHS) Now
Fortune Brands Home Security, Inc. currently boasts strong growth prospects on strength in its end markets, solid product portfolio, acquired assets and a sound capital-deployment strategy.
Notably, the Zacks Rank #1 (Strong Buy) company has a market capitalization of $11 billion. In the past six months, it has gained 10.3% against the industry’s decline of 0.7%.
Let’s delve onto the factors that make investment in the company a smart choice at the moment.
Solid End Markets: Fortune Brands has been experiencing strength across its plumbing business, backed by the success of its category and channel expansion strategies. Also, solid demand for decking products along with strength in its doors as well as security businesses supported by product launches is likely to continue supporting revenues of its Doors & Security segment. In addition, the growing popularity of the company’s value price point cabinetry products bodes well for its Cabinets segment.
Acquisition Benefits: Its buyout of Fiberon (September 2018) complements Fortune Brands' existing door brand — Therma-Tru — and enhances its growth opportunities in the outdoor living space. Notably, it invested in capacity and product line expansion in the security business, and the acquired Fiberon business. Its Fiberon decking brand grew in the mid-teens range in the second quarter of 2020.
Rewards to Shareholders: It remains committed to rewarding shareholders through share-buyback programs and dividend payouts apart from using its fund for acquiring lucrative businesses. In the first half of 2020, the company repurchased shares worth $150 million and paid out dividends worth $66.6 million. Also, in December 2019, it announced a 9% hike in its quarterly dividend rate.
Initiatives: The company’s focus on supply-chain optimization, manufacturing footprint optimization and other initiatives are likely to continue to improve margins and its financial performance in 2020. Also, several cost-control measures implemented by it including the reduction of operating expenses and non-essential capital expenditure will continue to help it maintain a healthy margin performance amid the coronavirus crisis.
In the past 30 days, the Zacks Consensus Estimate for its 2020 earnings has trended up from $2.98 to $3.80 on seven upward estimate revisions against none downward.
Other Stocks to Consider
Some other top-ranked stocks are Astec Industries, Inc. (ASTE - Free Report) , AptarGroup, Inc. (ATR - Free Report) and Casella Waste Systems, Inc. (CWST - Free Report) . While Astec currently sports a Zacks Rank #1, AptarGroup and Casella Waste Systems carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Astec delivered an earnings surprise of 124.31%, on average, in the trailing four quarters.
AptarGroup delivered an earnings surprise of 5.62%, on average, in the trailing four quarters.
Casella Waste Systems delivered an earnings surprise of 158.08%, on average, in the trailing four quarters.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>