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Barclays Rates Fortune Brands Home & Security ‘Equal-Weight’

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Price movement

Fortune Brands Home & Security (FBHS) has a market cap of $8.3 billion and rose 1.5% to close at $54.78 per share on January 6, 2017. The stock’s weekly, monthly, and YTD (year-to-date) price movements were 1.4%, -0.67%, and 2.5%, respectively, on the same day.

FBHS is now trading 0.37% below its 20-day moving average, 0.41% below its 50-day moving average, and 4.7% below its 200-day moving average.

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Related ETF and peers

The iShares Russell 3000 ETF (IWV) invests 0.04% of its holdings in FBHS. The YTD price movement of IWV was 1.7% on January 6.

The market caps of FBHS’s competitors are as follows:

  • Stanley Black & Decker (SWK): $17.8 billion
  • Masco (MAS): $10.7 billion
  • Spectrum Brands Holdings (SPB): $7.4 billion

FBHS’s rating and performance in 3Q16

On January 6, 2017, Barclays has initiated the coverage of Fortune Brands Home & Security with an “equal-weight” rating and set the stock’s price target at $59.0 per share.

Fortune Brands Home & Security reported 3Q16 net sales of $1.3 billion, which is a YoY (year-over-year) rise of 3.2% over its net sales of $1.2 billion in 3Q15. Sales from the Plumbing, Doors, and Security segments rose 7.3%, 4.4%, and 6.3%, respectively, in 3Q16 YoY. The company’s operating margin rose 140 basis points in 3Q16 YoY.

FBHS’s net income and EPS (earnings per share) rose to $123.4 million and $0.77, respectively, in 3Q16, as compared to $107.5 million and $0.61, respectively, in 3Q15. It reported adjusted EPS of $0.80 in 3Q16, which represents a YoY rise of 25.0%.

Its cash and cash equivalents and inventories rose 16.8% and 1.2%, respectively, in 3Q16 YoY.

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Quarterly dividend

Notably, Fortune Brands Home & Security has declared a quarterly cash dividend of $0.18 per share on its common stock. The dividend will be paid on March 15, 2017, to shareholders of record at the close of business on February 24, 2017.

Projections

Fortune Brands Home & Security (FBHS) made the following projections for fiscal 2016:

  • sales growth of 9.0%–10.0%
  • EPS before charges and gains of $2.72–$2.76
  • free cash flow of ~$400 million

Now let’s take a look at Pilgrim’s Pride (PPC).

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