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How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.
The fear of missing out, or FOMO, also plays a factor in investing, especially with particular tech giants, as well as popular consumer-facing stocks.
What if you'd invested in Masco (MAS) ten years ago? It may not have been easy to hold on to MAS for all that time, but if you did, how much would your investment be worth today?
Masco's Business In-Depth
With that in mind, let's take a look at Masco's main business drivers.
Headquartered in Taylor, MI, Masco Corporation manufactures, sells and installs home improvement and building products. Masco operates through the following two business segments:
Plumbing Products (accounting for 63% of 2020 net sales): The segment manufactures and markets an array of faucets, bathing and showering devices, valves, bathtubs, spas and toilets. This segment provides its products under the Delta, Brizo, Peerless, Hansgrohe, Axor, Ginger, Newport Brass, Brasstech, Waltec, Bristan, Heritage, Mirolin, Ha Ppe, Hot Spring, Caldera, Freeflow Spas, Fantasy Spas, Endless Pools, Brasscraft, Plumb Shop, Cobra, Cobra Pro, And Master Plumber brands.
Decorative Architectural Products (37%): The segment manufactures architectural coatings, including paints, primers, specialty paint products, stains and waterproofing products. These products are sold in the U.S., Canada, China, Mexico and South America. This segment provides its products under the Behr, Kilz, Liberty, Brainerd, Franklin Brass, Kichler, And A Lan brands.
On Nov 14, 2019, Masco signed a definitive agreement with ACProducts, Inc. to sell Masco Cabinetry LLC ("Cabinetry") for approximately $1 billion. On Feb 18, 2020, the company announced the completion of the deal for $850 million in cash at closing and preferred stock of $150 million.
As of Dec 31, 2020, the company had cash and cash investments of $1.3 million, in line with the third quarter-end level. At fourth quarter-end, long-term debt was $2.79 billion, unchanged from third-quarter 2020. The company ended the fourth quarter with approximately $2.3 billion of liquidity, which includes full availability of the $1-billion revolver.
Putting together a successful investment portfolio takes a combination of research, patience, and a little bit of risk. For Masco, if you bought shares a decade ago, you're likely feeling really good about your investment today.
A $1000 investment made in August 2011 would be worth $7,665.84, or a 666.58% gain, as of August 27, 2021, according to our calculations. Investors should note that this return excludes dividends but includes price increases.
In comparison, the S&P 500 gained 279.84% and the price of gold went up -5.52% over the same time frame.
Analysts are forecasting more upside for MAS too.
Masco recently reported second-quarter 2021 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate by 9.6% and 0.4%, respectively. Also, both the metrics jumped 34% and 24% year over year, respectively. North American Plumbing continues to benefit Masco. Plumbing Products segment sales grew 53% year over year in the quarter. Inorganic strategies, cost-saving initiatives and industry-leading branded building products also bode well. Adjusted gross margin and operating margin expanded 50 and 60 basis points from the prior year. Meanwhile, robust U.S. housing market fundamentals and repair & remodeling activities have been benefiting Masco. However, rise in raw material costs and expenses related to new product launches remain potent headwinds. Also, shares of Masco have underperformed the industry so far this year.
Shares have gained 5.20% over the past four weeks and there have been 4 higher earnings estimate revisions for fiscal 2021 compared to none lower. The consensus estimate has moved up as well.
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