Fortune Brands Home & Security, Inc.
Fortune Brands Home & Security, Inc. Fundamental Analysis
Fortune Brands Home & Security, Inc. (FBHS) shows weak financial fundamentals with a PE ratio of 24.94, profit margin of 6.69%, and ROE of 12.70%. The company generates $4.8B in annual revenue with weak year-over-year growth of -0.37%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 46.4/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze FBHS's fundamental strength across five key dimensions:
Efficiency Score
WeakFBHS struggles to generate sufficient returns from assets.
Valuation Score
ExcellentFBHS trades at attractive valuation levels.
Growth Score
ModerateFBHS shows steady but slowing expansion.
Financial Health Score
ModerateFBHS shows balanced financial health with some risks.
Profitability Score
WeakFBHS struggles to sustain strong margins.
Key Financial Metrics
Is FBHS Expensive or Cheap?
P/E Ratio
FBHS trades at 24.94 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, FBHS's PEG of -0.71 indicates potential undervaluation.
Price to Book
The market values Fortune Brands Home & Security, Inc. at 3.12 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 9.17 times EBITDA. This is generally considered low.
How Well Does FBHS Make Money?
Net Profit Margin
For every $100 in sales, Fortune Brands Home & Security, Inc. keeps $6.69 as profit after all expenses.
Operating Margin
Core operations generate 11.56 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $12.70 in profit for every $100 of shareholder equity.
ROA
Fortune Brands Home & Security, Inc. generates $4.58 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Fortune Brands Home & Security, Inc. produces operating cash flow of $864.88M, showing steady but balanced cash generation.
Free Cash Flow
Fortune Brands Home & Security, Inc. generates strong free cash flow of $895.99M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $6.99 in free cash annually.
FCF Yield
FBHS converts 10.59% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
24.94
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-0.71
vs 25 benchmark
P/B Ratio
Price to book value ratio
3.12
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.78
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
1.07
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.84
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.13
vs 25 benchmark
ROA
Return on assets percentage
0.05
vs 25 benchmark
ROCE
Return on capital employed
0.09
vs 25 benchmark
How FBHS Stacks Against Its Sector Peers
| Metric | FBHS Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 24.94 | 26.49 | Neutral |
| ROE | 12.70% | 1307.00% | Weak |
| Net Margin | 6.69% | -5131.00% (disorted) | Weak |
| Debt/Equity | 1.07 | 0.81 | Weak (High Leverage) |
| Current Ratio | 1.84 | 10.48 | Neutral |
| ROA | 4.58% | -1549793.00% (disorted) | Weak |
FBHS outperforms its industry in 0 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Fortune Brands Home & Security, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
-10.37%
Industry Style: Cyclical, Value, Infrastructure
DecliningEPS CAGR
22.48%
Industry Style: Cyclical, Value, Infrastructure
High GrowthFCF CAGR
17.48%
Industry Style: Cyclical, Value, Infrastructure
High Growth