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Masco (MAS) Gains From Buyouts, Repair & Remodel Activity
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Masco Corporation (MAS - Free Report) has been benefiting from strong housing industry backdrop, and solid demand for repair and remodel or R&R activity. Furthermore, focus on acquisitions to expand its portfolio bodes well.
The company’s shares have gained 63.5% over the past year, outperforming the Zacks Building Products – Miscellaneous industry’s 129.5% rally. Although the company’s shares have underperformed the industry, earnings estimates for 2021 have moved 4% north in the past 60 days.
This positive trend signifies bullish analysts’ sentiments and justifies the company’s Zacks Rank #2 (Buy), indicating robust fundamentals and the expectation of outperformance in the near term. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Factors to Drive Growth
Resilient Housing Market: Declining mortgage rates have been driving the U.S. housing industry in recent times. In addition to remarkable recovery in single-family housing construction, repair/remodel activity has also been robust, supported by do-it-yourself (DIY) and professional activity. Revival of housing demand and solid R&R activity have been a boon for Masco and companies like Louisiana-Pacific Corporation (LPX - Free Report) , Installed Building Products Inc. (IBP - Free Report) , PGT Innovations, Inc. from the same industry.
Over the years, Masco has remained focused on realigning its portfolio toward lower-ticket, less-cyclical, repair and remodel-oriented products. Strong DIY-oriented products position Masco particularly well to overcome coronavirus-associated uncertainty. Notably, the R&R industry represents approximately 90% of Masco’s business. Notably, the paint business has been one of the biggest beneficiaries amid the COVID-19 crisis as its DIY exposure, low ticket item and ease of use by homeowners have been driving strong demand.
Solid Buyouts: Masco follows a systematic acquisition strategy to broaden its portfolio. During the fourth quarter of 2020, Masco executed three bolt-on acquisitions, which are expected to contribute approximately 3% to top-line growth in 2021. The largest was the acquisition of Kraus, an online plumbing fixture company focused on modern, high-quality sinks faucets and related products. Kraus will operate as an affiliate of Delta Faucet Company and this brand will complement Masco's online capabilities in the fast-growing e-commerce channel.
Superior ROE: Marco’s superior return on equity (ROE) is indicative of growth potential. The company’s ROE currently stands at 514.2%. This compares favorably with ROE of 11.4% for the industry it belongs to. This reflects its efficiency in using shareholders’ funds and ability to generate profit with minimum capital usage.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
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Masco (MAS) Gains From Buyouts, Repair & Remodel Activity
Masco Corporation (MAS - Free Report) has been benefiting from strong housing industry backdrop, and solid demand for repair and remodel or R&R activity. Furthermore, focus on acquisitions to expand its portfolio bodes well.
The company’s shares have gained 63.5% over the past year, outperforming the Zacks Building Products – Miscellaneous industry’s 129.5% rally. Although the company’s shares have underperformed the industry, earnings estimates for 2021 have moved 4% north in the past 60 days.
This positive trend signifies bullish analysts’ sentiments and justifies the company’s Zacks Rank #2 (Buy), indicating robust fundamentals and the expectation of outperformance in the near term. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Factors to Drive Growth
Resilient Housing Market: Declining mortgage rates have been driving the U.S. housing industry in recent times. In addition to remarkable recovery in single-family housing construction, repair/remodel activity has also been robust, supported by do-it-yourself (DIY) and professional activity. Revival of housing demand and solid R&R activity have been a boon for Masco and companies like Louisiana-Pacific Corporation (LPX - Free Report) , Installed Building Products Inc. (IBP - Free Report) , PGT Innovations, Inc. from the same industry.
Over the years, Masco has remained focused on realigning its portfolio toward lower-ticket, less-cyclical, repair and remodel-oriented products. Strong DIY-oriented products position Masco particularly well to overcome coronavirus-associated uncertainty. Notably, the R&R industry represents approximately 90% of Masco’s business. Notably, the paint business has been one of the biggest beneficiaries amid the COVID-19 crisis as its DIY exposure, low ticket item and ease of use by homeowners have been driving strong demand.
Solid Buyouts: Masco follows a systematic acquisition strategy to broaden its portfolio. During the fourth quarter of 2020, Masco executed three bolt-on acquisitions, which are expected to contribute approximately 3% to top-line growth in 2021. The largest was the acquisition of Kraus, an online plumbing fixture company focused on modern, high-quality sinks faucets and related products. Kraus will operate as an affiliate of Delta Faucet Company and this brand will complement Masco's online capabilities in the fast-growing e-commerce channel.
Superior ROE: Marco’s superior return on equity (ROE) is indicative of growth potential. The company’s ROE currently stands at 514.2%. This compares favorably with ROE of 11.4% for the industry it belongs to. This reflects its efficiency in using shareholders’ funds and ability to generate profit with minimum capital usage.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2021 today >>