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Fortune Brands Home & Security Hikes Dividend by 8%

Fortune Brands Home & Security Inc. (FBHS) is a leading home and security products firm with a portfolio of leading branded products used for residential home repair, remodeling, new construction, and security.

The company generated 40% of its revenue from cabinets, 36% of its revenue from plumbing, and 25% of its revenue from doors and security during the fourth quarter of 2020. These revenues are generated primarily through wholesalers (44%) and home center retailers (30%) with 84% generated in the U.S. and 16% from international sources.

Better Than Expected Results

Fortune Brands Home & Security reported fourth quarter revenue that rose 12.9% to $1.66 billion, beating consensus estimates by $50 million, while non-GAAP earnings per share hit $1.25, beating consensus estimates by eight cents per share. While year-over-year revenue growth was fairly even between segments, plumbing was the fastest growing segment.

After reporting fourth quarter financial results, several analysts raised their price targets on the stock. KeyBanc analyst Kenneth Zener, for example, raised his price target from $95 to $105 in early February, citing sales growth and rising margins as cabinet execution improved throughout the year.

The company raised its quarterly dividend by 8.3% to $0.26 per share, which represents a 1.2% forward yield. The dividend is payable on March 17, 2021 to shareholders on record as of February 26, 2021.

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