Intrinsic value of Fortune Brands Home&Security - FBHS

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$64.19

  Intrinsic Value

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  Rating & Target

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  Value-price divergence*

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$64.19

 
Intrinsic value

$70.76

 
Up/down potential

+10%

 
Rating

hold

 
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*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of FBHS stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 9.8

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  8.87
  6.30
  6.17
  6.05
  5.95
  5.85
  5.77
  5.69
  5.62
  5.56
  5.50
  5.45
  5.41
  5.37
  5.33
  5.30
  5.27
  5.24
  5.22
  5.20
  5.18
  5.16
  5.14
  5.13
  5.12
  5.10
  5.09
  5.08
  5.08
  5.07
  5.06
Revenue, $m
  4,985
  5,299
  5,626
  5,967
  6,321
  6,691
  7,077
  7,480
  7,901
  8,340
  8,799
  9,279
  9,780
  10,305
  10,855
  11,430
  12,032
  12,662
  13,323
  14,015
  14,740
  15,501
  16,298
  17,134
  18,010
  18,929
  19,893
  20,905
  21,966
  23,079
  24,247
Variable operating expenses, $m
 
  3,502
  3,706
  3,920
  4,142
  4,374
  4,615
  4,868
  5,131
  5,406
  5,693
  5,810
  6,125
  6,453
  6,797
  7,157
  7,534
  7,929
  8,343
  8,776
  9,231
  9,707
  10,206
  10,729
  11,278
  11,854
  12,457
  13,091
  13,755
  14,452
  15,184
Fixed operating expenses, $m
 
  1,102
  1,129
  1,158
  1,187
  1,216
  1,247
  1,278
  1,310
  1,343
  1,376
  1,410
  1,446
  1,482
  1,519
  1,557
  1,596
  1,636
  1,677
  1,719
  1,762
  1,806
  1,851
  1,897
  1,944
  1,993
  2,043
  2,094
  2,146
  2,200
  2,255
Total operating expenses, $m
  4,352
  4,604
  4,835
  5,078
  5,329
  5,590
  5,862
  6,146
  6,441
  6,749
  7,069
  7,220
  7,571
  7,935
  8,316
  8,714
  9,130
  9,565
  10,020
  10,495
  10,993
  11,513
  12,057
  12,626
  13,222
  13,847
  14,500
  15,185
  15,901
  16,652
  17,439
Operating income, $m
  633
  695
  790
  889
  993
  1,102
  1,215
  1,335
  1,460
  1,591
  1,729
  2,058
  2,210
  2,370
  2,538
  2,715
  2,902
  3,097
  3,303
  3,520
  3,748
  3,989
  4,241
  4,507
  4,788
  5,083
  5,393
  5,720
  6,064
  6,427
  6,808
EBITDA, $m
  756
  942
  1,041
  1,144
  1,252
  1,365
  1,484
  1,608
  1,738
  1,875
  2,018
  2,169
  2,328
  2,494
  2,669
  2,853
  3,046
  3,249
  3,463
  3,688
  3,925
  4,175
  4,437
  4,713
  5,004
  5,310
  5,632
  5,971
  6,328
  6,704
  7,100
Interest expense (income), $m
  44
  50
  56
  62
  69
  76
  83
  91
  98
  107
  115
  124
  133
  143
  153
  164
  175
  187
  199
  212
  225
  239
  254
  270
  286
  303
  321
  340
  359
  380
  401
Earnings before tax, $m
  582
  645
  734
  827
  924
  1,026
  1,132
  1,244
  1,362
  1,485
  1,614
  1,934
  2,077
  2,227
  2,385
  2,551
  2,726
  2,910
  3,104
  3,308
  3,523
  3,749
  3,987
  4,238
  4,502
  4,780
  5,072
  5,381
  5,705
  6,047
  6,407
Tax expense, $m
  170
  174
  198
  223
  249
  277
  306
  336
  368
  401
  436
  522
  561
  601
  644
  689
  736
  786
  838
  893
  951
  1,012
  1,077
  1,144
  1,215
  1,291
  1,370
  1,453
  1,540
  1,633
  1,730
Net income, $m
  413
  471
  536
  603
  674
  749
  827
  908
  994
  1,084
  1,178
  1,412
  1,516
  1,626
  1,741
  1,863
  1,990
  2,125
  2,266
  2,415
  2,572
  2,737
  2,911
  3,094
  3,286
  3,489
  3,703
  3,928
  4,165
  4,414
  4,677

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  252
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  5,129
  5,185
  5,505
  5,838
  6,185
  6,547
  6,925
  7,319
  7,731
  8,160
  8,609
  9,079
  9,570
  10,084
  10,621
  11,184
  11,773
  12,390
  13,036
  13,713
  14,423
  15,167
  15,947
  16,765
  17,622
  18,522
  19,465
  20,455
  21,493
  22,582
  23,725
Adjusted assets (=assets-cash), $m
  4,877
  5,185
  5,505
  5,838
  6,185
  6,547
  6,925
  7,319
  7,731
  8,160
  8,609
  9,079
  9,570
  10,084
  10,621
  11,184
  11,773
  12,390
  13,036
  13,713
  14,423
  15,167
  15,947
  16,765
  17,622
  18,522
  19,465
  20,455
  21,493
  22,582
  23,725
Revenue / Adjusted assets
  1.022
  1.022
  1.022
  1.022
  1.022
  1.022
  1.022
  1.022
  1.022
  1.022
  1.022
  1.022
  1.022
  1.022
  1.022
  1.022
  1.022
  1.022
  1.022
  1.022
  1.022
  1.022
  1.022
  1.022
  1.022
  1.022
  1.022
  1.022
  1.022
  1.022
  1.022
Average production assets, $m
  1,698
  1,807
  1,918
  2,035
  2,156
  2,282
  2,413
  2,551
  2,694
  2,844
  3,000
  3,164
  3,335
  3,514
  3,701
  3,898
  4,103
  4,318
  4,543
  4,779
  5,027
  5,286
  5,558
  5,843
  6,141
  6,455
  6,784
  7,129
  7,490
  7,870
  8,268
Working capital, $m
  602
  371
  394
  418
  442
  468
  495
  524
  553
  584
  616
  650
  685
  721
  760
  800
  842
  886
  933
  981
  1,032
  1,085
  1,141
  1,199
  1,261
  1,325
  1,393
  1,463
  1,538
  1,616
  1,697
Total debt, $m
  1,431
  1,604
  1,785
  1,974
  2,171
  2,376
  2,590
  2,814
  3,047
  3,291
  3,546
  3,812
  4,090
  4,381
  4,686
  5,005
  5,339
  5,689
  6,056
  6,440
  6,842
  7,264
  7,706
  8,170
  8,656
  9,166
  9,701
  10,262
  10,851
  11,468
  12,116
Total liabilities, $m
  2,767
  2,940
  3,121
  3,310
  3,507
  3,712
  3,926
  4,150
  4,383
  4,627
  4,882
  5,148
  5,426
  5,717
  6,022
  6,341
  6,675
  7,025
  7,392
  7,776
  8,178
  8,600
  9,042
  9,506
  9,992
  10,502
  11,037
  11,598
  12,187
  12,804
  13,452
Total equity, $m
  2,362
  2,245
  2,384
  2,528
  2,678
  2,835
  2,999
  3,169
  3,347
  3,533
  3,728
  3,931
  4,144
  4,366
  4,599
  4,843
  5,098
  5,365
  5,645
  5,938
  6,245
  6,567
  6,905
  7,259
  7,631
  8,020
  8,428
  8,857
  9,306
  9,778
  10,273
Total liabilities and equity, $m
  5,129
  5,185
  5,505
  5,838
  6,185
  6,547
  6,925
  7,319
  7,730
  8,160
  8,610
  9,079
  9,570
  10,083
  10,621
  11,184
  11,773
  12,390
  13,037
  13,714
  14,423
  15,167
  15,947
  16,765
  17,623
  18,522
  19,465
  20,455
  21,493
  22,582
  23,725
Debt-to-equity ratio
  0.606
  0.710
  0.750
  0.780
  0.810
  0.840
  0.860
  0.890
  0.910
  0.930
  0.950
  0.970
  0.990
  1.000
  1.020
  1.030
  1.050
  1.060
  1.070
  1.080
  1.100
  1.110
  1.120
  1.130
  1.130
  1.140
  1.150
  1.160
  1.170
  1.170
  1.180
Adjusted equity ratio
  0.433
  0.433
  0.433
  0.433
  0.433
  0.433
  0.433
  0.433
  0.433
  0.433
  0.433
  0.433
  0.433
  0.433
  0.433
  0.433
  0.433
  0.433
  0.433
  0.433
  0.433
  0.433
  0.433
  0.433
  0.433
  0.433
  0.433
  0.433
  0.433
  0.433
  0.433

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  413
  471
  536
  603
  674
  749
  827
  908
  994
  1,084
  1,178
  1,412
  1,516
  1,626
  1,741
  1,863
  1,990
  2,125
  2,266
  2,415
  2,572
  2,737
  2,911
  3,094
  3,286
  3,489
  3,703
  3,928
  4,165
  4,414
  4,677
Depreciation, amort., depletion, $m
  123
  247
  251
  255
  259
  264
  268
  273
  278
  284
  289
  111
  117
  124
  130
  137
  144
  152
  160
  168
  177
  186
  196
  206
  216
  227
  239
  251
  264
  277
  291
Funds from operations, $m
  753
  718
  787
  859
  934
  1,012
  1,095
  1,181
  1,272
  1,367
  1,467
  1,523
  1,633
  1,749
  1,871
  2,000
  2,135
  2,277
  2,426
  2,583
  2,749
  2,923
  3,106
  3,299
  3,502
  3,716
  3,942
  4,179
  4,429
  4,691
  4,968
Change in working capital, $m
  102
  22
  23
  24
  25
  26
  27
  28
  29
  31
  32
  34
  35
  37
  38
  40
  42
  44
  46
  48
  51
  53
  56
  59
  61
  64
  67
  71
  74
  78
  82
Cash from operations, $m
  651
  769
  764
  835
  909
  986
  1,068
  1,153
  1,243
  1,337
  1,435
  1,489
  1,598
  1,713
  1,833
  1,960
  2,093
  2,233
  2,380
  2,535
  2,698
  2,870
  3,050
  3,241
  3,441
  3,652
  3,874
  4,108
  4,354
  4,614
  4,887
Maintenance CAPEX, $m
  0
  -60
  -64
  -68
  -72
  -76
  -80
  -85
  -90
  -95
  -100
  -106
  -111
  -117
  -124
  -130
  -137
  -144
  -152
  -160
  -168
  -177
  -186
  -196
  -206
  -216
  -227
  -239
  -251
  -264
  -277
New CAPEX, $m
  -149
  -109
  -111
  -116
  -121
  -126
  -132
  -137
  -143
  -150
  -157
  -164
  -171
  -179
  -187
  -196
  -205
  -215
  -225
  -236
  -247
  -259
  -272
  -285
  -299
  -313
  -329
  -345
  -362
  -380
  -398
Cash from investing activities, $m
  -385
  -169
  -175
  -184
  -193
  -202
  -212
  -222
  -233
  -245
  -257
  -270
  -282
  -296
  -311
  -326
  -342
  -359
  -377
  -396
  -415
  -436
  -458
  -481
  -505
  -529
  -556
  -584
  -613
  -644
  -675
Free cash flow, $m
  266
  599
  589
  651
  716
  784
  856
  931
  1,010
  1,092
  1,179
  1,220
  1,316
  1,416
  1,522
  1,633
  1,750
  1,873
  2,003
  2,139
  2,282
  2,433
  2,593
  2,760
  2,937
  3,122
  3,318
  3,524
  3,741
  3,970
  4,211
Issuance/(repayment) of debt, $m
  -806
  173
  181
  189
  197
  205
  214
  223
  233
  244
  255
  266
  278
  291
  305
  319
  334
  350
  366
  384
  402
  422
  442
  464
  486
  510
  535
  561
  589
  618
  648
Issuance/(repurchase) of shares, $m
  -409
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -152
  173
  181
  189
  197
  205
  214
  223
  233
  244
  255
  266
  278
  291
  305
  319
  334
  350
  366
  384
  402
  422
  442
  464
  486
  510
  535
  561
  589
  618
  648
Total cash flow (excl. dividends), $m
  111
  772
  770
  840
  913
  990
  1,070
  1,154
  1,243
  1,336
  1,433
  1,486
  1,594
  1,708
  1,827
  1,952
  2,084
  2,223
  2,369
  2,523
  2,685
  2,855
  3,035
  3,224
  3,423
  3,632
  3,853
  4,085
  4,330
  4,588
  4,859
Retained Cash Flow (-), $m
  89
  -135
  -139
  -144
  -150
  -157
  -164
  -171
  -178
  -186
  -194
  -203
  -213
  -222
  -233
  -244
  -255
  -267
  -280
  -293
  -307
  -322
  -338
  -354
  -371
  -389
  -408
  -429
  -450
  -472
  -495
Prev. year cash balance distribution, $m
 
  252
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  889
  632
  696
  763
  833
  907
  984
  1,065
  1,150
  1,239
  1,283
  1,382
  1,485
  1,594
  1,708
  1,829
  1,956
  2,089
  2,230
  2,377
  2,533
  2,697
  2,870
  3,051
  3,243
  3,445
  3,657
  3,881
  4,116
  4,364
Discount rate, %
 
  5.10
  5.36
  5.62
  5.90
  6.20
  6.51
  6.83
  7.18
  7.54
  7.91
  8.31
  8.72
  9.16
  9.62
  10.10
  10.60
  11.13
  11.69
  12.27
  12.89
  13.53
  14.21
  14.92
  15.66
  16.45
  17.27
  18.13
  19.04
  19.99
  20.99
PV of cash for distribution, $m
 
  846
  569
  590
  606
  617
  621
  619
  612
  598
  579
  533
  506
  475
  441
  404
  365
  325
  286
  247
  210
  176
  145
  117
  93
  72
  55
  41
  29
  21
  14
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Fortune Brands Home & Security, Inc. provides home and security products for use in residential home repair, remodeling, new construction, and security applications. It operates in four segments: Cabinets, Plumbing, Doors, and Security. The Cabinets segment manufactures custom, semi-custom, and stock cabinetry, as well as vanities for the kitchen, bath, and other parts of the home under various brand names, including Aristokraft, Diamond, Kitchen Craft, Mid-Continent, Kitchen Classics, Schrock, Omega, Thomasville, Homecrest, Ultracraft, and StarMark. The Plumbing segment manufactures or assembles, and sells faucets, accessories, kitchen sinks, and waste disposals under the Moen and Waste King brand names in North America, China, Mexico, Southeast Asia, and South America. The Doors segment manufactures and sells fiberglass and steel residential entry door and patio door systems under the Therma-Tru brand name; and urethane millwork products under the Fypon brand name in the United States and Canada. The Security segment offers key-controlled and combination padlocks, bicycle and cable locks, built-in locker locks, door hardware, automotive, trailer and towing locks, electronic access control solutions, and other specialty safety and security devices under the Master Lock brand name; and fire resistant safes, security containers, and commercial cabinets in the United States, Canada, Europe, Central America, and Australia. The company sells its products through kitchen and bath dealers, wholesalers oriented toward builders or professional remodelers, industrial and locksmith distributors, do-it-yourself remodeling-oriented home centers, and other retail outlets. Fortune Brands Home & Security, Inc. was founded in 1988 and is headquartered in Deerfield, Illinois.

FINANCIAL RATIOS  of  Fortune Brands Home&Security (FBHS)

Valuation Ratios
P/E Ratio 23.8
Price to Sales 2
Price to Book 4.2
Price to Tangible Book
Price to Cash Flow 15.1
Price to Free Cash Flow 19.6
Growth Rates
Sales Growth Rate 8.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 15.5%
Cap. Spend. - 3 Yr. Gr. Rate 9%
Financial Strength
Quick Ratio NaN
Current Ratio 0.1
LT Debt to Equity 60.6%
Total Debt to Equity 60.6%
Interest Coverage 14
Management Effectiveness
Return On Assets 8.9%
Ret/ On Assets - 3 Yr. Avg. 6.8%
Return On Total Capital 11.1%
Ret/ On T. Cap. - 3 Yr. Avg. 8.7%
Return On Equity 17.2%
Return On Equity - 3 Yr. Avg. 12.3%
Asset Turnover 1
Profitability Ratios
Gross Margin 36.4%
Gross Margin - 3 Yr. Avg. 35%
EBITDA Margin 15%
EBITDA Margin - 3 Yr. Avg. 13.6%
Operating Margin 12.7%
Oper. Margin - 3 Yr. Avg. 11.2%
Pre-Tax Margin 11.7%
Pre-Tax Margin - 3 Yr. Avg. 10.5%
Net Profit Margin 8.3%
Net Profit Margin - 3 Yr. Avg. 6.4%
Effective Tax Rate 29.2%
Eff/ Tax Rate - 3 Yr. Avg. 30.9%
Payout Ratio 23.7%

FBHS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the FBHS stock intrinsic value calculation we used $4985 million for the last fiscal year's total revenue generated by Fortune Brands Home&Security. The default revenue input number comes from 2016 income statement of Fortune Brands Home&Security. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our FBHS stock valuation model: a) initial revenue growth rate of 6.3% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 5.1%, whose default value for FBHS is calculated based on our internal credit rating of Fortune Brands Home&Security, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Fortune Brands Home&Security.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of FBHS stock the variable cost ratio is equal to 66.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $1075 million in the base year in the intrinsic value calculation for FBHS stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for Fortune Brands Home&Security.

Corporate tax rate of 27% is the nominal tax rate for Fortune Brands Home&Security. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the FBHS stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for FBHS are equal to 34.1%.

Life of production assets of 28.4 years is the average useful life of capital assets used in Fortune Brands Home&Security operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for FBHS is equal to 7%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $2362 million for Fortune Brands Home&Security - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 153.164 million for Fortune Brands Home&Security is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Fortune Brands Home&Security at the current share price and the inputted number of shares is $9.8 billion.


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COMPANY NEWS

▶ Fortune Brands Home & Security posts 1Q profit   [04:26PM  Associated Press]
▶ Indexes Higher As Retail Leads; 2 Lesser-Known Stocks Hit Buy Points   [Apr-06-17 01:27PM  Investor's Business Daily]
▶ Therma-Tru Previews New Products   [Feb-08-17 12:25PM  Business Wire]
▶ Mastering The Art Of Multitasking   [08:57AM  PR Newswire]
▶ What Makes Americans Steam at the Stovetop?   [Dec-22-16 09:15AM  Marketwired]
▶ How Do You Know When You're an Adult?   [Dec-20-16 09:15AM  Marketwired]
▶ Fortune Brands Increases Quarterly Dividend by 13 Percent   [Dec-13-16 04:05PM  Business Wire]
▶ Is Fortune Brands Home & Security Inc (FBHS) A Good Stock To Buy?   [Dec-09-16 06:04PM  at Insider Monkey]
▶ ConAgra Splits Its Menu, but We're Not Hungry   [07:00AM  at Morningstar]
▶ The Download on Dirty Dishes   [Nov-22-16 09:15AM  Marketwired]
▶ Fortune Brands Declares Quarterly Dividend   [Sep-27-16 04:05PM  Business Wire]
Stock chart of FBHS Financial statements of FBHS
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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