Masco

Methodology

Masco's earnings exhibit cyclicality tied to home improvement spending and new construction activity, requiring normalization to mid-cycle levels for meaningful analysis. The repair and remodel focus provides more stability than pure new construction exposure. Use average earnings across housing cycles rather than peak or trough figures for reliable fair value estimates.

Methodology

Masco can show misleadingly low PEG ratios during housing booms when growth accelerates, or high ratios during downturns despite eventual recovery. The metric works best when comparing to building products peers and historical ranges while adjusting for housing cycle positioning. Brand strength in faucets and cabinets can justify modest premiums to commodity building product companies.

Methodology

Masco offers an attractive dividend that management has grown over time, with PEGY providing better visibility into total shareholder returns for this cyclical manufacturer. The dividend adds stability during housing market volatility while buybacks supplement capital allocation. Total return focus matters more than isolated growth metrics for this mature building products company.