Fortune Brands Innovations Inc (FBIN, Financial), a prominent player in the construction sector, has recently witnessed a notable shift in its stock performance. Over the past week, the stock price has decreased by 2.69%, settling at $78.05. However, looking at a broader timeline, FBIN has experienced a significant increase of 14.05% over the past three months. According to the current GF Value, which stands at $76.07, the stock is considered Fairly Valued. This is a shift from three months ago when it was seen as Modestly Undervalued.
Overview of Fortune Brands Innovations Inc
Fortune Brands Innovations Inc operates within the construction industry, focusing on home and security products. The company boasts three main segments: a $2.6 billion water segment led by Moen, a $1.3 billion outdoors segment under brands like Therma-Tru and Fiberon, and a $723 million security segment with brands such as Master Lock and Yale. These segments collectively underscore FBIN's diversified approach in addressing various consumer needs in home improvement and security solutions.
Assessing Profitability
FBIN's financial health is robust, with a Profitability Rank of 8/10, indicating high profitability within its industry. The company's Operating Margin is impressive at 15.38%, higher than 84.71% of its peers. Additionally, its Return on Equity (ROE) and Return on Assets (ROA) stand at 19.83% and 6.68% respectively, both outperforming a majority of competitors. The Return on Invested Capital (ROIC) is also noteworthy at 10.29%, further highlighting the company's efficient capital use. FBIN has consistently maintained profitability over the past decade, a testament to its solid business model and operational excellence.
Growth Prospects
FBIN's Growth Rank is 6/10, reflecting moderate growth potential. The company has demonstrated a 3-year revenue growth rate per share of 11.90%, surpassing 65.09% of its industry peers. However, its 5-year EPS growth rate stands at 4.70%, indicating some challenges in maintaining earnings momentum. Looking ahead, FBIN is projected to see a revenue growth rate of 4.71% and an EPS growth rate of 11.26% over the next 3 to 5 years, suggesting potential for future expansion and profitability.
Investor Confidence
FBIN's stock is held by notable investors, including Bill Nygren (Trades, Portfolio) who owns 4,031,300 shares, representing 3.25% of the shares outstanding. Other significant holders include Diamond Hill Capital (Trades, Portfolio) and Renaissance Technologies (Trades, Portfolio), holding smaller but substantial stakes. This investor confidence reflects a strong belief in the company's market strategy and future prospects.
Competitive Landscape
FBIN competes with companies like Trex Co Inc (TREX, Financial), Advanced Drainage Systems Inc (WMS, Financial), and AAON Inc (AAON, Financial), with market caps ranging from $6.74 billion to $11.02 billion. This comparison highlights FBIN's competitive positioning within a closely contested market, underscoring its ability to maintain a strong presence amidst tough competition.
Conclusion
Fortune Brands Innovations Inc presents a compelling case for investors, with its stock currently fairly valued and showing potential for future growth. The company's strong profitability metrics and strategic market segments, coupled with robust financial health, position it well against competitors. As such, FBIN remains an attractive option for investors looking for stability and growth in the construction and home products industry.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
