Intrinsic value of Masco - MAS

Previous Close

$37.00

  Intrinsic Value

premium content

  Rating & Target

premium content

  Value-price divergence*

premium content

Previous close

$37.00

 
Intrinsic value

$15.05

 
Up/down potential

-59%

 
Rating

str. sell

 
Value-price divergence* premium content

Premium access subscription - $499/yr

please register and log in before paying

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

We calculate the intrinsic value of MAS 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 11.9

 

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, %
  3.01
  3.30
  3.47
  3.62
  3.76
  3.88
  4.00
  4.10
  4.19
  4.27
  4.34
  4.41
  4.47
  4.52
  4.57
  4.61
  4.65
  4.68
  4.72
  4.74
  4.77
  4.79
  4.81
  4.83
  4.85
  4.86
  4.88
  4.89
  4.90
  4.91
  4.92
Revenue, $m
  7,357
  7,600
  7,863
  8,148
  8,455
  8,783
  9,134
  9,508
  9,907
  10,329
  10,778
  11,253
  11,755
  12,287
  12,848
  13,440
  14,065
  14,724
  15,419
  16,150
  16,921
  17,732
  18,586
  19,484
  20,429
  21,422
  22,467
  23,566
  24,721
  25,935
  27,211
Variable operating expenses, $m
 
  2,688
  2,778
  2,876
  2,981
  3,093
  3,213
  3,342
  3,478
  3,623
  3,777
  3,856
  4,028
  4,211
  4,403
  4,606
  4,820
  5,046
  5,284
  5,535
  5,799
  6,077
  6,369
  6,677
  7,001
  7,341
  7,699
  8,076
  8,472
  8,888
  9,325
Fixed operating expenses, $m
 
  3,891
  3,988
  4,088
  4,190
  4,295
  4,402
  4,512
  4,625
  4,741
  4,859
  4,981
  5,105
  5,233
  5,364
  5,498
  5,635
  5,776
  5,920
  6,068
  6,220
  6,376
  6,535
  6,698
  6,866
  7,038
  7,214
  7,394
  7,579
  7,768
  7,962
Total operating expenses, $m
  6,304
  6,579
  6,766
  6,964
  7,171
  7,388
  7,615
  7,854
  8,103
  8,364
  8,636
  8,837
  9,133
  9,444
  9,767
  10,104
  10,455
  10,822
  11,204
  11,603
  12,019
  12,453
  12,904
  13,375
  13,867
  14,379
  14,913
  15,470
  16,051
  16,656
  17,287
Operating income, $m
  1,053
  1,021
  1,097
  1,185
  1,284
  1,395
  1,519
  1,655
  1,803
  1,966
  2,142
  2,416
  2,622
  2,843
  3,081
  3,337
  3,610
  3,902
  4,214
  4,547
  4,902
  5,280
  5,681
  6,108
  6,562
  7,044
  7,554
  8,096
  8,671
  9,279
  9,924
EBITDA, $m
  1,212
  1,180
  1,258
  1,349
  1,451
  1,565
  1,692
  1,832
  1,985
  2,151
  2,332
  2,527
  2,738
  2,965
  3,209
  3,470
  3,749
  4,048
  4,367
  4,707
  5,070
  5,455
  5,865
  6,301
  6,764
  7,256
  7,777
  8,330
  8,915
  9,536
  10,193
Interest expense (income), $m
  198
  186
  76
  84
  93
  102
  112
  122
  133
  145
  158
  171
  186
  201
  217
  233
  251
  270
  290
  310
  332
  355
  380
  405
  432
  460
  490
  521
  554
  589
  625
Earnings before tax, $m
  830
  836
  1,021
  1,101
  1,191
  1,293
  1,407
  1,532
  1,670
  1,820
  1,984
  2,244
  2,436
  2,643
  2,865
  3,103
  3,359
  3,633
  3,925
  4,237
  4,570
  4,924
  5,302
  5,703
  6,130
  6,583
  7,064
  7,575
  8,116
  8,690
  9,298
Tax expense, $m
  296
  226
  276
  297
  322
  349
  380
  414
  451
  491
  536
  606
  658
  714
  773
  838
  907
  981
  1,060
  1,144
  1,234
  1,330
  1,431
  1,540
  1,655
  1,777
  1,907
  2,045
  2,191
  2,346
  2,511
Net income, $m
  491
  610
  745
  804
  870
  944
  1,027
  1,119
  1,219
  1,329
  1,448
  1,638
  1,778
  1,929
  2,091
  2,265
  2,452
  2,652
  2,865
  3,093
  3,336
  3,595
  3,870
  4,163
  4,475
  4,806
  5,157
  5,530
  5,925
  6,344
  6,788

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1,191
  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
  5,137
  4,077
  4,219
  4,371
  4,536
  4,712
  4,900
  5,101
  5,315
  5,542
  5,782
  6,037
  6,307
  6,592
  6,893
  7,211
  7,546
  7,899
  8,272
  8,664
  9,078
  9,513
  9,971
  10,453
  10,960
  11,493
  12,053
  12,643
  13,262
  13,914
  14,598
Adjusted assets (=assets-cash), $m
  3,946
  4,077
  4,219
  4,371
  4,536
  4,712
  4,900
  5,101
  5,315
  5,542
  5,782
  6,037
  6,307
  6,592
  6,893
  7,211
  7,546
  7,899
  8,272
  8,664
  9,078
  9,513
  9,971
  10,453
  10,960
  11,493
  12,053
  12,643
  13,262
  13,914
  14,598
Revenue / Adjusted assets
  1.864
  1.864
  1.864
  1.864
  1.864
  1.864
  1.864
  1.864
  1.864
  1.864
  1.864
  1.864
  1.864
  1.864
  1.864
  1.864
  1.864
  1.864
  1.864
  1.864
  1.864
  1.864
  1.864
  1.864
  1.864
  1.864
  1.864
  1.864
  1.864
  1.864
  1.864
Average production assets, $m
  708
  730
  755
  782
  812
  843
  877
  913
  951
  992
  1,035
  1,080
  1,129
  1,180
  1,233
  1,290
  1,350
  1,414
  1,480
  1,550
  1,624
  1,702
  1,784
  1,870
  1,961
  2,057
  2,157
  2,262
  2,373
  2,490
  2,612
Working capital, $m
  1,474
  296
  307
  318
  330
  343
  356
  371
  386
  403
  420
  439
  458
  479
  501
  524
  549
  574
  601
  630
  660
  692
  725
  760
  797
  835
  876
  919
  964
  1,011
  1,061
Total debt, $m
  2,997
  1,231
  1,359
  1,496
  1,644
  1,803
  1,972
  2,153
  2,345
  2,549
  2,766
  2,995
  3,238
  3,494
  3,765
  4,051
  4,353
  4,671
  5,007
  5,360
  5,732
  6,124
  6,536
  6,969
  7,426
  7,905
  8,410
  8,940
  9,498
  10,084
  10,700
Total liabilities, $m
  5,435
  3,669
  3,797
  3,934
  4,082
  4,241
  4,410
  4,591
  4,783
  4,987
  5,204
  5,433
  5,676
  5,932
  6,203
  6,489
  6,791
  7,109
  7,445
  7,798
  8,170
  8,562
  8,974
  9,407
  9,864
  10,343
  10,848
  11,378
  11,936
  12,522
  13,138
Total equity, $m
  -298
  408
  422
  437
  454
  471
  490
  510
  531
  554
  578
  604
  631
  659
  689
  721
  755
  790
  827
  866
  908
  951
  997
  1,045
  1,096
  1,149
  1,205
  1,264
  1,326
  1,391
  1,460
Total liabilities and equity, $m
  5,137
  4,077
  4,219
  4,371
  4,536
  4,712
  4,900
  5,101
  5,314
  5,541
  5,782
  6,037
  6,307
  6,591
  6,892
  7,210
  7,546
  7,899
  8,272
  8,664
  9,078
  9,513
  9,971
  10,452
  10,960
  11,492
  12,053
  12,642
  13,262
  13,913
  14,598
Debt-to-equity ratio
  -10.057
  3.020
  3.220
  3.420
  3.630
  3.830
  4.020
  4.220
  4.410
  4.600
  4.780
  4.960
  5.130
  5.300
  5.460
  5.620
  5.770
  5.910
  6.050
  6.190
  6.310
  6.440
  6.550
  6.670
  6.780
  6.880
  6.980
  7.070
  7.160
  7.250
  7.330
Adjusted equity ratio
  -0.377
  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
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  491
  610
  745
  804
  870
  944
  1,027
  1,119
  1,219
  1,329
  1,448
  1,638
  1,778
  1,929
  2,091
  2,265
  2,452
  2,652
  2,865
  3,093
  3,336
  3,595
  3,870
  4,163
  4,475
  4,806
  5,157
  5,530
  5,925
  6,344
  6,788
Depreciation, amort., depletion, $m
  159
  158
  161
  164
  167
  170
  174
  177
  181
  185
  190
  111
  116
  122
  127
  133
  139
  146
  153
  160
  167
  175
  184
  193
  202
  212
  222
  233
  245
  257
  269
Funds from operations, $m
  638
  768
  906
  967
  1,037
  1,114
  1,201
  1,296
  1,400
  1,514
  1,638
  1,750
  1,895
  2,051
  2,218
  2,398
  2,591
  2,797
  3,018
  3,253
  3,503
  3,770
  4,054
  4,356
  4,677
  5,018
  5,379
  5,763
  6,170
  6,601
  7,057
Change in working capital, $m
  -88
  9
  10
  11
  12
  13
  14
  15
  16
  16
  17
  19
  20
  21
  22
  23
  24
  26
  27
  29
  30
  32
  33
  35
  37
  39
  41
  43
  45
  47
  50
Cash from operations, $m
  726
  1,307
  896
  956
  1,025
  1,101
  1,187
  1,281
  1,385
  1,498
  1,621
  1,731
  1,875
  2,030
  2,197
  2,375
  2,567
  2,772
  2,991
  3,224
  3,473
  3,739
  4,021
  4,321
  4,640
  4,979
  5,339
  5,720
  6,125
  6,553
  7,007
Maintenance CAPEX, $m
  0
  -73
  -75
  -78
  -81
  -84
  -87
  -90
  -94
  -98
  -102
  -107
  -111
  -116
  -122
  -127
  -133
  -139
  -146
  -153
  -160
  -167
  -175
  -184
  -193
  -202
  -212
  -222
  -233
  -245
  -257
New CAPEX, $m
  -180
  -22
  -25
  -27
  -29
  -32
  -34
  -36
  -38
  -41
  -43
  -46
  -48
  -51
  -54
  -57
  -60
  -63
  -67
  -70
  -74
  -78
  -82
  -86
  -91
  -95
  -100
  -105
  -111
  -117
  -122
Cash from investing activities, $m
  -124
  -95
  -100
  -105
  -110
  -116
  -121
  -126
  -132
  -139
  -145
  -153
  -159
  -167
  -176
  -184
  -193
  -202
  -213
  -223
  -234
  -245
  -257
  -270
  -284
  -297
  -312
  -327
  -344
  -362
  -379
Free cash flow, $m
  602
  1,212
  796
  851
  915
  986
  1,066
  1,155
  1,252
  1,359
  1,475
  1,579
  1,715
  1,863
  2,021
  2,191
  2,374
  2,569
  2,778
  3,001
  3,240
  3,493
  3,763
  4,051
  4,357
  4,681
  5,026
  5,392
  5,780
  6,192
  6,628
Issuance/(repayment) of debt, $m
  -412
  -1,764
  127
  138
  148
  159
  169
  181
  192
  204
  217
  229
  243
  257
  271
  286
  302
  318
  335
  353
  372
  392
  412
  434
  456
  480
  505
  530
  558
  586
  616
Issuance/(repurchase) of shares, $m
  -458
  1,257
  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  
  -918
  -507
  127
  138
  148
  159
  169
  181
  192
  204
  217
  229
  243
  257
  271
  286
  302
  318
  335
  353
  372
  392
  412
  434
  456
  480
  505
  530
  558
  586
  616
Total cash flow (excl. dividends), $m
  -350
  -551
  923
  989
  1,063
  1,145
  1,236
  1,336
  1,445
  1,563
  1,692
  1,808
  1,958
  2,119
  2,292
  2,477
  2,676
  2,887
  3,114
  3,355
  3,612
  3,885
  4,176
  4,485
  4,813
  5,161
  5,531
  5,923
  6,338
  6,778
  7,244
Retained Cash Flow (-), $m
  163
  -1,895
  -14
  -15
  -16
  -18
  -19
  -20
  -21
  -23
  -24
  -25
  -27
  -29
  -30
  -32
  -34
  -35
  -37
  -39
  -41
  -44
  -46
  -48
  -51
  -53
  -56
  -59
  -62
  -65
  -68
Prev. year cash balance distribution, $m
 
  1,189
  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
 
  0
  909
  973
  1,046
  1,127
  1,217
  1,316
  1,423
  1,541
  1,668
  1,783
  1,931
  2,091
  2,262
  2,446
  2,642
  2,852
  3,076
  3,315
  3,570
  3,841
  4,130
  4,436
  4,762
  5,108
  5,475
  5,864
  6,276
  6,713
  7,176
Discount rate, %
 
  7.30
  7.67
  8.05
  8.45
  8.87
  9.32
  9.78
  10.27
  10.79
  11.32
  11.89
  12.49
  13.11
  13.77
  14.45
  15.18
  15.93
  16.73
  17.57
  18.45
  19.37
  20.34
  21.35
  22.42
  23.54
  24.72
  25.96
  27.25
  28.62
  30.05
PV of cash for distribution, $m
 
  0
  784
  772
  756
  737
  713
  684
  651
  613
  570
  518
  471
  421
  372
  323
  276
  231
  190
  153
  121
  93
  70
  52
  37
  26
  18
  12
  7
  5
  3
Current shareholders' claim on cash, %
  100
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0

Masco Corporation designs, manufactures, markets, and distributes home improvement and building products worldwide. Its Plumbing Products segment provides faucets, showerheads, handheld showers, valves, bathing units, shower enclosures, toilets, acrylic tubs, shower trays, spas products, exercise pools and systems, brass and copper plumbing system components, and other non-decorative plumbing products. The company’s Decorative Architectural Products segment offers architectural coatings, including paints, primers, specialty paints, stains, and waterproofing products; cabinet, door, window, and hardware products; and functional hardware, wall plates, hook and rail products, and picture hanging accessories, as well as decorative bath hardware, shower accessories, and shower doors. The company’s Cabinetry Products segment offers assembled cabinetry for kitchen, bath, storage, home office, and home entertainment applications; and integrated bathroom vanity and countertop products. Its Windows and Other Specialty Products segment provides vinyl, fiberglass, and aluminum windows and patio doors; vinyl windows, and composite and panel doors; and staple guns, hammer tackers, glue guns, and rivet tools, as well as staples, glues, and rivets. The company sells its products under DELTA, BRIZO, PEERLESS, HANSGROHE, AXOR, GINGER, NEWPORT BRASS, BRASSTECH, WALTEC, BRISTAN, HERITAGE, MIROLIN, HÜPPE, HOT SPRING, CALDERA, FREEFLOW SPAS, FANTASY SPAS, ENDLESS POOLS, BRASSCRAFT, PLUMB SHOP, COBRA, MASTER PLUMBER, BEHR, KILZ, LIBERTY, BRAINERD, FRANKLIN BRASS, KRAFTMAID, CARDELL, MERILLAT, QUALITY CABINETS, MOORES, ESSENCE SERIES, MILGARD, DURAFLEX, GRIFFIN, PREMIER, EVOLUTION, ARROW, POWERSHOT, and EASYSHOT brands. It offers its products through home center retailers, mass merchandisers, hardware stores, homebuilders, distributors, and other outlets to consumers and contractors, as well as directly to consumers. The company was founded in 1929 and is headquartered in Taylor, Michigan.

FINANCIAL RATIOS  of  Masco (MAS)

Valuation Ratios
P/E Ratio 24
Price to Sales 1.6
Price to Book -39.5
Price to Tangible Book
Price to Cash Flow 16.2
Price to Free Cash Flow 21.5
Growth Rates
Sales Growth Rate 3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 13.9%
Cap. Spend. - 3 Yr. Gr. Rate 7.4%
Financial Strength
Quick Ratio 596
Current Ratio 0
LT Debt to Equity -1005%
Total Debt to Equity -1005.7%
Interest Coverage 5
Management Effectiveness
Return On Assets 11.5%
Ret/ On Assets - 3 Yr. Avg. 12.1%
Return On Total Capital 16.4%
Ret/ On T. Cap. - 3 Yr. Avg. 15.4%
Return On Equity -226.8%
Return On Equity - 3 Yr. Avg. -7.1%
Asset Turnover 1.4
Profitability Ratios
Gross Margin 33.4%
Gross Margin - 3 Yr. Avg. 31.4%
EBITDA Margin 16.1%
EBITDA Margin - 3 Yr. Avg. 14.6%
Operating Margin 14.3%
Oper. Margin - 3 Yr. Avg. 12.5%
Pre-Tax Margin 11.3%
Pre-Tax Margin - 3 Yr. Avg. 9.4%
Net Profit Margin 6.7%
Net Profit Margin - 3 Yr. Avg. 8%
Effective Tax Rate 35.7%
Eff/ Tax Rate - 3 Yr. Avg. 2.3%
Payout Ratio 26.1%

MAS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MAS stock intrinsic value calculation we used $7357 million for the last fiscal year's total revenue generated by Masco. The default revenue input number comes from 2016 income statement of Masco. 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 MAS stock valuation model: a) initial revenue growth rate of 3.3% 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 7.3%, whose default value for MAS is calculated based on our internal credit rating of Masco, 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 Masco.
    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 MAS stock the variable cost ratio is equal to 35.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $3796 million in the base year in the intrinsic value calculation for MAS 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 6.2% for Masco.

Corporate tax rate of 27% is the nominal tax rate for Masco. 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 MAS 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 MAS are equal to 9.6%.

Life of production assets of 9.7 years is the average useful life of capital assets used in Masco 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 MAS is equal to 3.9%. 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 - $-298 million for Masco - 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 321.573 million for Masco 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 Masco at the current share price and the inputted number of shares is $11.9 billion.


Premium access subscription - $499/yr

please register and log in before paying
RELATED COMPANIES Price Int.Val. Rating
FBHS Fortune Brands 62.85 prem.  prem.
AMWD American Woodm 88.90 prem.  prem.
SPB Spectrum Brand 132.01 prem.  prem.
PATK Patrick Indust 64.95 prem.  prem.
CSTE Caesarstone 38.05 prem.  prem.

COMPANY NEWS

▶ ETFs with exposure to Masco Corp. : May 23, 2017   [May-23-17 12:57PM  Capital Cube]
▶ ETFs with exposure to Masco Corp. : April 28, 2017   [Apr-28-17 04:04PM  Capital Cube]
▶ Masco Is Flowing to the Upside   [Apr-25-17 04:38PM  TheStreet.com]
▶ Masco tops Street 1Q forecasts   [07:08AM  Associated Press]
▶ Masco Corp. Value Analysis (NYSE:MAS) : April 24, 2017   [Apr-24-17 03:34PM  Capital Cube]
▶ Masco Corporation to Host Investor Day on May 16, 2017   [Apr-18-17 09:00AM  Business Wire]
▶ Masco Corporation Trades Ex-Dividend Wednesday   [Apr-09-17 05:38PM  Investopedia]
▶ 3 Residential Construction Stocks to Buy in 2017   [Apr-05-17 10:00AM  Motley Fool]
▶ Masco Corporation Declares Quarterly Dividend   [Mar-24-17 09:00AM  Business Wire]
▶ TopBuild: Cramer's Top Takeaways   [Mar-09-17 06:25AM  TheStreet.com]
▶ These Four Stocks Perform Well in March   [Mar-06-17 01:00PM  Investopedia]
▶ Is CenterPoint Energy, Inc. (CNP) A Good Stock To Buy?   [Nov-30-16 01:37AM  at Insider Monkey]
▶ Hedge Funds Are Betting On Masco Corp (MAS)   [Nov-24-16 10:41AM  at Insider Monkey]
▶ Lowe's: 5 Reasons to Bail Now   [11:49AM  at Barrons.com]
▶ Masco shares drag homebuilders after earnings miss   [Oct-25-16 04:05PM  at CNBC]
Stock chart of MAS Financial statements of MAS Annual reports of MAS
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.

FREE DOWNLOAD
Follow us on:   twitter   twitter   twitter   twitter

VALUATION THEORY       ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2017. All rigths reserved.