Fortune Brands Home & Security (NYSE: FBHS) and Valmont Industries (NYSE:VMI) are both mid-cap industrial products companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, valuation, profitability, institutional ownership, earnings, risk and analyst recommendations.
Volatility and Risk
Fortune Brands Home & Security has a beta of 1.37, suggesting that its stock price is 37% more volatile than the S&P 500. Comparatively, Valmont Industries has a beta of 0.99, suggesting that its stock price is 1% less volatile than the S&P 500.
This table compares Fortune Brands Home & Security and Valmont Industries’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Fortune Brands Home & Security||8.62%||18.64%||8.85%|
Institutional and Insider Ownership
87.9% of Fortune Brands Home & Security shares are owned by institutional investors. Comparatively, 83.7% of Valmont Industries shares are owned by institutional investors. 1.6% of Fortune Brands Home & Security shares are owned by company insiders. Comparatively, 3.3% of Valmont Industries shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Fortune Brands Home & Security pays an annual dividend of $0.72 per share and has a dividend yield of 1.1%. Valmont Industries pays an annual dividend of $1.50 per share and has a dividend yield of 0.9%. Fortune Brands Home & Security pays out 24.8% of its earnings in the form of a dividend. Valmont Industries pays out 17.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Valmont Industries has increased its dividend for 3 consecutive years.
Valuation and Earnings
This table compares Fortune Brands Home & Security and Valmont Industries’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Fortune Brands Home & Security||$5.13 billion||1.99||$822.40 million||$2.90||22.81|
|Valmont Industries||$2.64 billion||1.36||$344.67 million||$8.38||18.92|
Fortune Brands Home & Security has higher revenue and earnings than Valmont Industries. Valmont Industries is trading at a lower price-to-earnings ratio than Fortune Brands Home & Security, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent recommendations and price targets for Fortune Brands Home & Security and Valmont Industries, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Fortune Brands Home & Security||0||7||9||0||2.56|
Fortune Brands Home & Security currently has a consensus target price of $69.62, suggesting a potential upside of 5.24%. Valmont Industries has a consensus target price of $176.00, suggesting a potential upside of 11.01%. Given Valmont Industries’ stronger consensus rating and higher possible upside, analysts clearly believe Valmont Industries is more favorable than Fortune Brands Home & Security.
Fortune Brands Home & Security beats Valmont Industries on 10 of the 17 factors compared between the two stocks.
Fortune Brands Home & Security Company Profile
Fortune Brands Home & Security, Inc. is a holding company. The Company operates through four segments. The Cabinets segment includes custom, semi-custom and stock cabinetry for the kitchen, bath and other parts of the home under brand names, including Aristokraft, Mid-Continent, Diamond, Kitchen Classics, Kitchen Craft, Schrock, Omega, Homecrest, Thomasville, StarMark and Ultracraft. The Plumbing segment manufactures or assembles and sells faucets, bath furnishings, accessories and kitchen sinks and waste disposals under the Moen, Riobel, ROHL, Perrin & Rowe, and Waste King brands. The Doors segment includes residential fiberglass and steel entry door systems under the Therma-Tru brand name and urethane millwork product lines under the Fypon brand name. The Security segment includes locks, safety and security devices and electronic security products under the Master Lock brand name and fire resistant safes, security containers and commercial cabinets under the SentrySafe brand name.
Valmont Industries Company Profile
Valmont Industries, Inc. is a producer of fabricated metal products, and steel, aluminum and composite pole, tower and other structures, and mechanized irrigation systems. The Company’s segments are Engineered Support Structures (ESS); Utility Support Structures; Energy and Mining; Coatings; Irrigation, and Other. The ESS segment manufactures steel, aluminum, and composite poles and structures. The Utility Support Structures Segment manufactures steel and concrete pole structures for electrical transmission, substation and distribution applications. The Energy and Mining Segment produces access systems, which are engineered structures and components that allow people to move safely in an industrial, infrastructure or commercial facility. The Coatings Segment consists of galvanizing, anodizing and powder coating services on a global basis. The Irrigation Segment manufactures and distributes mechanical irrigation equipment and related service parts under the Valley brand name.
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