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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Fortune Brands Home & Security, Inc. (XNYS:FBHS) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
FBHS
Name:
FORTUNE BRANDS HOME & SECURITY, INC. (XNYS:FBHS)
Sector:
- 243900.00K
Industry:
Furnishings, Fixtures & Appliances
CEO:
Mr. Nicholas Fink
Total Employees:
28,056
Our Technological Advancement Rating
Our Rating:
A
Technological advancement compared to industry is 127.00% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF FORTUNE BRANDS HOME & SECURITY, INC.(FBHS) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND FURNISHINGS, FIXTURES & APPLIANCES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
60.56
One Month Price Target:
$61.09
Six Month Price Target :
$63.75
Likely Price in One Year's Time:
Ticker:
$66.94
Likely Trading Range Today Under (Normal Volatility)
$60.3
Price Upper limit ($) :
$60.85
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$57.21
This week:
$53.08
This month :
$45.59
Other Primary facts
Market Cap:
7.74B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
129.32M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
15.91%
-15.84%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$76.10
$69.00
$45.02
$52.12
Medium risk (<10%) entry points
Buy Call
Sell Call
$66.69
Buy Put:
Sell Put:
$65.17
$54.41
$55.95
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
FBHS
Sharpe Ratio:
0.64%
Comparison:
FBHS, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -42.88% lower than the industry
& is -72.13% lower than the market/S&P 500 average
Average Returns/Yield of
FBHS
Daily returns:
0.03%
Weekly returns:
0.13%
Monthly returns:
0.52%
Yearly returns:
14.35%
Comparison of returns:
Average annual returns/yield (last 3 years) is -56.48% below industry average
Classification:
FBHS, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.83
Statistical test of Returns:
FBHS has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.70%
Weekly Volatility:
6.05%
Monthly Volatility:
12.09%
Yearly Volatility:
41.89%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.60%
Volatility in last five trading days has been -77.79% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.53%
Weekly VaR:
-12.36%
Monthly VaR:
-24.72%
How Much Can the price of
FBHS
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-22%
Worst case (decline):
-85.62%
This translates to price declining to:
$47.50
This translates to price declining to:
$8.71
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
FBHS is a 74.46% riskier investment compared to the market/S&P 500 & is 49.46% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -31.53% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
FBHS
Beta in relation to market/S&P 500--1.57
Expected beta in 1 year's time:
0.925
Expected beta in 3 year's time:
1.308
Unlevered (debt free) Beta:
0.815
Beta in relation to Nasdaq (XNAS):
0.97
Beta in relation to all global stocks::
0.914
Beta Comparison & Analysis
Beta of competitors/peers::
1.367
Beta is 14.71% higher than peers
Average Industry Beta:
1.707
Beta is -8.15% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
20.89%
Sustainable growth rate is -37.56% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.076
Alpha is 1451.44% above industry average alpha yield
Alpha is -487% below the market average
Analysis of Cost of Capital of
FBHS
Equity cost of capital:
0.139
Equity cost of capital is -6.42% below industry mean WACC
Unlevered (without debt) cost of capital:
7.22%
Before-tax cost of debt:
2.41%
After-tax cost of debt:
1.90%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.90%
WACC is -2.20% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$60.34
Revenue growth rate per share of (3Y):
2.69
Annual revenue growth rate is -15.51% below industry average
EPS:
$5.61
Expected Annual growth rate of EPS (3Y):
21.42%
Expected future EPS growth rate is 76.19% higher than the Furnishings, Fixtures & Appliances industry
Free cash flow (FCF) per share:
$2.36
Balance sheet equity growth per share: 25.78%
Equity growth rate per share is -1581.63% lower than the industry
Debt per share
$27.21
EBITDA per share
$9.96
Valuation Analysis Today of
FBHS
P/E Ratio:
10.95
P/E Ratio of Competitors/Peers:
15.79
P/E ratio is -30.61% lower than main peers & is -32.27% lower than the industry
Stock price/value with industry average P/E ratio: $90.73
FBHS is -33.25% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $22.17
Present value of the expected future dividends only: $9.73
P/S (Price to Sales ratio):
1
Price to sales ratio is 9.52% above the industry mean
P/B (Price to book value ratio):
2.69
Price to free cash flow: 25.65
Price to free cash flow ratio is -84.99% lower than the industry
Net income growth rate (3Y):
100.88%
Net income growth rate is -233.54% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 4.80%
Dividend yeild: 1.78%
Previous Dividend: $0.28
Previous adjusted dividend: $0.28
Previous Dividend: $1.08
Expected next dividend best case: $0.30
Expected next dividend worst case: $0.26
Average dividend payment (long-term): $0.25
Average dividend increase/decrease (growth rate) % per period: 2.51%
Expected next dividend payment date: 13/09/2022
Expected next dividend record date: 25/08/2022
Expected next dividend declaration date: 08/01/2022
Previous dividend payment date: 15/06/2022
Previous dividend record date: 27/05/2022
Previous dividend declaration date: 05/02/2022
Dividend History:
2022-05-26--$0.28
2021-11-24--$0.26
2021-05-27--$0.26
2022-02-24--$0.28
2021-08-26--$0.26
2021-02-25--$0.26
Dividend growth rate is -118.86% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
120.73%
Net debt to equity ratio:
107.75%
Debt to assets ratio:
42.69%
Net debt to assets ratio:
38.10%
Debt-to-asset ratio is -42.53% below industry average
Ability to repay debt:
Interest coverage ratio:
15.2
Interest coverage ratio is -83.24% less than industry average
Looking forward:
Debt growth rate:
-0.11%
Annual debt growth is -100% lower than industry average debt growth rate
Debt repayment rate in last quarter: 45.30%
Analysis of Key Statistics
Correlation of price movement with the market:
0.732
Statistical significance of correlation:
FBHS has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.556
Stock price is 31.59% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.556
Correlation of price movement with Nasdaq (^IXIC):
-0.012
Covariance of price movement with the market:
-0.019
Kurtosis
6.617
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.099
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
FBHS
Gross Profit Margin Ratio:
143%
Operating Profit Margin Ratio:
14.04%
Operating profit margin is 89.81% higher than the industry
Net Profit Margin Ratio:
143%
Effective Tax Rate:
23.55%
Effective tax rate is 27.56% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
26.61%
Return on equity (ROE) is -9.28% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
9.41%
Return on assets (ROA) is 5.00% higher than the industry
Financial Leverage:
1.7x
Current Ratio:
2.18
Current ratio is 40.36% above industry average
Cash Conversion Cycle (days):
7.2
Cash conversion cycle is -87.10% below industry average
The remaining useful life of property plant & equipment is: 8.5 years
Stock based compensation to net income ratio:
1.59%
In-depth Efficiency Analysis
Revenue generated per employee:
278.1K
Each employee generates -36% less revenue than industry average revenue per employee
EBITDA generated per employee:
45.9K
Each employee generates 21% more EBITDA than industry average revenue per employee
Profit generated per employee:
27.6K
Each employee generates 31% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 8.7K
Each employee generates -34% less free cash flow than industry average revenue per employee
Assets/Capital per employee
188.4K
Each employee generates -34% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
FBHS
WHIRLPOOL CORPORATION (XNYS:WHR)
CROWN HOLDINGS, INC. (XNYS:CCK)
PULTEGROUP, INC. (XNYS:PHM)
ADVANCE AUTO PARTS, INC. (XNYS:AAP)
INTERCONTINENTAL HOTELS GROUP PLC (XNYS:IHG)
VAIL RESORTS, INC. (XNYS:MTN)
WESTROCK COMPANY (XNYS:WRK)
FLOOR & DECOR HOLDINGS, INC. (XNYS:FND)
BATH & BODY WORKS, INC. (XNYS:BBWI)
Current Analyst Ratings
Strong buy�21%
Buy�25%
Hold�46%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
7.80B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
5.02B
2.78B
-
-
1.62B
-
63.50M
1.68B
-
84.70M
188.30M
1.29B
1.10B
775.50M
1.01B
238.90M
775.50M
Statement of Cash Flow
Date:
Period:
46.90M
Differed Income Tax :
5.70M
Stock Based Compensation :
12.30M
Change in Working Capital :
- 434500.00K
Accounts Receivables:
- 118100.00K
Other Working Capital:
-
Other Non-Cash Items:
5.60M
Net Cash Provided by Operating Activities:
- 183100.00K
Investments in PP&E:
-
Net Acquisitions:
- 61600.00K
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
378.20M
-
378.20M
1.01B
1.33B
232.20M
2.96B
1.25B
2.49B
1.38B
-
-
168.00M
5.29B
-
8.24B
728.10M
-
-
-
626.70M
1.35B
3.52B
258.00M
3.97B
-
5.33B
1.90M
2.99B
35.3M
-
March 31, 2022 at 6:00:00 AM
6.70B
2.91B
8.24B
-
3.52B
3.1B
-
- 52800.00K
- 114400.00K
- 2914000.00K
-
- 377100.00K
- 37200.00K
3.53B
203.20M
700.00K
- 93600.00K
382.50M
476.10M
- 183100.00K
- 60800.00K
- 243900.00K
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
FBHS
2023
2024
2025
2026
2027
$67.27
$96.58
$106.76
$118.00
$130.44