* Note: Prices are in Million (M) USD.
Description:
Masco Corporation is a manufacturer of products for the home improvement and new home construction markets.
These criteria used Company's Cash, EBITDA and Debt balance to determines its fair value:
Cash : $390 M
Debt : $3,224 M
EBITDA : $1,276 M
Net Debt (Debt - Cash): $2,834 M
Since Net Debt is covered by EBITDA within 3 years, 1 points assigned.
This criteria used industry in which company operates:
Sector: Basic materials
Industry: Building materials
Based on industry, 3 points assigned.
This criteria used Company's Price To Earning (P/E) Ratio to determines its fair value:
Forward PE Ratio: 18.05
Since Forward PE Ratio is between 15 - 20, 3 points assigned.
This criteria used Company's ability to convert Sales into free cash flow to determine fair value:
Using last 20 overlapping fiscal years (max 20).Average Free Cash Flow: $658 M
Average Revenue: $8,568 M
Revenue Converted To Free Cash Flow (%): 7.7%
Since Free Cash Flow (FCF) to Revenue percentage is less than 15, 1 point assigned.
This criteria used company's growth potential to calculate its fair value:
Latest Revenue (2024-12-31): $7,828 M
Revenue 4 Years Ago (2020-12-31): $7,188 M
Last 5 Years Average Revenue Growth: 2%
Since Revenue Growth is between 0 - 5, 1 point assigned.
This criteria used Company's ability to buy back its own share:
Latest Share Count (2024-12-31): $219 M
Share Count 5 Years Ago (2020-12-31): $264 M
Company is buying back its own shares, 3 points assigned.
This criteria used Company's dividend payout ratio to determine its fair value:
Next Year Earnings Per Share (EPS): $4.16
Trailing 12-Month Earnings Per Share (EPS): $3.99
Average Earnings Per Share (EPS): $4.08
Dividend Per Share (DPS): $1
Payout Ratio: 29%
Dividend Yield: 2%
Since company Payout Ratio is less than 50, 2 points assigned.
Since Dividend Yield is greater than 1, 1 point assigned.
This criteria used Company's Return On Equity (ROE%) to determine its fair value:
Using last 11 valid ROE years (max 20).Average ROE: 34.8%
Since Average ROE is greater than 20, 5 points assigned.
This criteria used Company's current price to its 52 week low price to determines its fair value:
Current Price: $74
52-Week Low: $56
Threshold Price (15% Above 52-Week Low): $64
Since Current price is not within 15% threshold, 0 point assigned.
This criteria used Company's Market Cap to determines its fair value:
Market Capitalization: $15,392 M
Since Market Cap is between 10B - 100B, 2 points assigned.
% Exposure to Total Portfolio
Based on the market cap, we recommend do not exceed 3% exposure of Total Portfolio.
Value-Trade has assigned 22 points to above Masco Corporation (MAS) stock.
Heads up: One or more P/E inputs look exaggerated and may skew the blend.
• ROE Based PE
37.82 (>2× median)
Further research is recommended; please use your own due diligence.In such cases, multiplying earnings by the long-run average P/E typically gives a closer, more reliable fair value.
Rule of thumb: Last 16 Years Avg P/E (19.42)
× EPS ($4.08) = $79.15.
Last 16 Years Avg PE 19.42, Fair Value PE 15, Industry Based PE 16, Growth Based PE 1, RCFC Based PE 16.15, ROE Based PE 37.82, Risk-Free Anchored PE (25% MoS) 17.08. Based on these 7 values, average assigned is 17.50. Value-Trades has assined P/E value 17.50. Since an average (Current Year EPS + Next Year EPS) earning per share is $4.0757.
The fair value of Masco Corporation (MAS) stock should be (17.50 x $4.0757) = $71.31.
