Updated 3/11/25

Masco Corporation is a well-known name in the home improvement industry, producing a wide range of building products, including cabinetry, plumbing fixtures, and coatings. With brands like Delta and Behr, the company benefits from strong brand loyalty and a steady demand for renovation and construction materials.

For investors focused on dividends, Masco presents an interesting case. While it doesn’t offer the highest yield on the market, its dividend is reliable, growing, and backed by a strong financial foundation. The real question is whether Masco fits into a long-term income portfolio. Let’s break it down.

Key Dividend Metrics

📈 Dividend Yield: 1.68% (Forward)
💰 Annual Dividend Payout: $1.24 per share
🔄 5-Year Average Yield: 1.57%
📊 Payout Ratio: 30.85% (Sustainable and leaves room for growth)
📅 Ex-Dividend Date: February 21, 2025
📆 Last Dividend Payment: March 10, 2025

At first glance, Masco’s dividend yield might not turn heads. But when looking deeper, the low payout ratio and history of dividend increases make it a solid choice for investors seeking stable and growing income.

Dividend Overview

Masco has built a reputation for steady dividend payments. The current forward yield of 1.68% sits slightly above the company’s five-year average, which suggests that dividend investors are getting a fair deal at current prices.

One of the most encouraging signs is the payout ratio of just 30.85%. This means the company only uses a small portion of its earnings to fund dividend payments, allowing for reinvestment in the business and future dividend hikes.

While this isn’t a stock for those chasing high-yield dividends, it does provide a strong blend of income and long-term capital appreciation potential.

Dividend Growth and Safety

For income investors, dividend safety is just as important as yield. Masco’s strong financial position makes it well-equipped to continue increasing its payout over time.

• The company has consistently raised its dividend, demonstrating a commitment to rewarding shareholders.
• Strong cash flow generation backs up these payments. Operating cash flow over the last year totaled $1.08 billion, while free cash flow reached $808 million.
• With a payout ratio below 35%, Masco has plenty of room to continue increasing dividends even during economic downturns.

The company isn’t an income powerhouse, but for those who prioritize dividend stability and growth, it offers an attractive setup.

Chart Analysis

 

The stock chart for Masco Corporation () reveals a lot about recent price action, trends, and investor sentiment. Looking at the moving averages, volume, and RSI, we can piece together where the stock might be in its current cycle and what momentum is driving it.

Moving Averages and Trend Direction

The chart includes both the 50-day moving average (orange line) and the 200-day moving average (blue line). These two indicators are essential for identifying the stock’s medium- and long-term trends.

Right now, the 50-day moving average is sloping downward and has recently crossed below the 200-day moving average, which is a bearish signal often referred to as a death cross. This suggests the stock has lost momentum and could be in a downtrend phase. The 200-day moving average is still slightly rising, indicating the longer-term trend isn’t completely broken, but the fact that the price is hovering near or below both moving averages adds to the cautious outlook.

There was a period of strong upside movement in the middle of the chart, where the price surged well above both moving averages. However, that rally faded, and the stock has since pulled back, struggling to reclaim its previous highs.

Recent Price Action

The most recent price action shows MAS closing at 73.27, near the lower end of the day’s range. The stock opened at 73.69, reached a high of 74.51, and then drifted downward. The fact that it closed closer to the low of the day suggests selling pressure outweighed buying demand.

Over the last few months, the stock has been making a series of lower highs, which points to weakening bullish momentum. A key level to watch is around 75, where the stock has repeatedly struggled to gain traction. If it can break back above that level and hold, it could shift sentiment in a more positive direction.

Volume and Market Participation

The volume on this particular day was 52,213 shares, which seems relatively light. When volume is low, it suggests there isn’t strong conviction behind the price movement, meaning the stock could be in a consolidation phase rather than experiencing a strong trend shift.

Looking at the volume bars across the chart, there were a few notable spikes in trading activity, particularly during upward moves in late summer and early fall. However, more recent trading appears subdued, which aligns with the stock’s struggle to reclaim higher levels.

If a breakout occurs, volume should ideally increase to confirm that buyers are stepping in with confidence. On the flip side, if volume spikes during a selloff, it could indicate further downside risk.

Relative Strength Index (RSI)

The RSI indicator at the bottom of the chart shows the stock’s momentum. The RSI appears to be hovering in the lower half of its range, meaning the stock isn’t overbought or oversold but is leaning toward weaker momentum.

Earlier in the chart, the RSI showed stronger readings during uptrends, but it has cooled off in recent months. If it dips below 30, the stock could enter oversold territory, which sometimes leads to a short-term bounce. However, if RSI remains weak and struggles to move above 50, it suggests the stock isn’t gaining enough strength to reverse its recent downtrend.

Key Takeaways from the Last Five Candles

Examining the last five trading sessions, the candles show a mix of indecision and selling pressure. The wicks on some of these candles indicate attempted moves higher that were quickly rejected, signaling that buyers are having trouble sustaining momentum.

• The most recent candle closed near its low, suggesting bearish sentiment dominated the session.
• Several of the prior candles had long upper wicks, meaning the stock attempted to push higher but was met with selling pressure.
• There’s no clear bullish reversal pattern yet, meaning the stock might still be looking for a firm support level.

If selling pressure continues, a test of lower support zones in the 70 to 72 range wouldn’t be surprising. On the other hand, if the stock can reclaim the 75 to 76 level with strong volume, it might signal that buyers are regaining control.

Analyst Ratings

Masco Corporation (MAS) has recently experienced a mix of analyst opinions, reflecting both optimism and caution regarding its future performance. The consensus among analysts presents an average 12-month price target of approximately $86.79, with forecasts ranging from a low of $75.75 to a high of $98.70.​

Upgrades

In the past 90 days, Masco’s stock has received two upgrades from analysts. These positive revisions are often attributed to the company’s robust financial health, consistent dividend payouts, and strong positioning within the home improvement and building products industry. Analysts upgrading the stock may also be responding to Masco’s strategic initiatives aimed at enhancing operational efficiency and expanding its market share.​

Downgrades

Conversely, the stock has also experienced a downgrade in the same timeframe. This cautionary stance could be linked to concerns over macroeconomic factors such as rising interest rates, which might dampen consumer spending on home renovations and new constructions. Additionally, fluctuations in raw material costs and supply chain disruptions could pose challenges to Masco’s profit margins, prompting a more conservative outlook from some analysts.​

Overall, the mixed analyst ratings and the consensus price target suggest a balanced perspective on Masco’s prospects, acknowledging both its strengths and the potential headwinds it may face.

Earnings Report Summary

Masco Corporation recently shared its latest earnings results, giving investors a closer look at how the company performed over the past quarter and full year. While there were some mixed signals in the numbers, the company remains focused on profitability, shareholder returns, and steady operations.

Fourth Quarter Highlights

• Sales dipped slightly to $1.83 billion, down about 3% from the same quarter last year. Not a major drop, but something to keep an eye on.
• Profitability improved, with the operating profit margin rising to 15.9%, a solid jump of 280 basis points. This shows Masco is managing costs well, even in a softer sales environment.
• Earnings per share (EPS) landed at $0.85, holding steady compared to the same period last year.

Full Year Performance

• Total sales for the year came in at $7.83 billion, about 2% lower than the previous year.
• Margins held up well, with the full-year operating profit margin increasing slightly to 17.4%.
• EPS for 2024 ended at $3.76, slightly down from $4.02 in 2023, but still reflecting strong financial discipline.

Business Segments at a Glance

• Plumbing products had a small dip, with sales down 1% in the quarter. Not a huge concern, but worth monitoring.
• Decorative architectural products saw a bigger decline, with sales falling 6% compared to the previous year. This segment has been feeling the effects of a slowing home improvement market.

Cash Flow and Shareholder Returns

• Masco finished the quarter with $1.63 billion in liquidity, including cash on hand and access to credit. This keeps them in a strong financial position.
• Shareholder returns remained a priority, with the company sending $1 billion back to investors through stock buybacks and dividends.

Looking Ahead to 2025

• EPS projections for 2025 are expected to fall between $4.20 and $4.45, showing confidence in continued profitability.
• Dividends are getting a boost, with the board approving a 7% increase to $0.31 per share. The next payout is scheduled for March 10, 2025, for investors holding shares as of February 21.

Masco is holding steady despite some challenges in the housing and home improvement markets. With solid profitability and a continued focus on rewarding shareholders, the company remains on solid ground heading into 2025.

Financial Health and Stability

Dividends are only as strong as the company paying them, so it’s important to look at Masco’s financial strength.

• Revenue over the last twelve months was $7.83 billion, but quarterly revenue declined by 2.9% year-over-year. While not alarming, it’s something to watch.
• Profitability remains strong, with an operating margin of 16.41% and a net profit margin of 10.5%.
• The company carries $3.21 billion in total debt but maintains a current ratio of 1.75, indicating that it has the liquidity to meet short-term obligations.
• Return on equity appears extremely high at 2,731%, but this is due to Masco’s financial structure, where equity has been reduced through share buybacks.

Despite some minor revenue softness, Masco remains in solid financial health, supporting its ability to continue paying and growing its dividend.

Valuation and Stock Performance

Masco isn’t a bargain, but it’s also not overvalued given its strong fundamentals.

• The trailing price-to-earnings (P/E) ratio stands at 19.66, while the forward P/E is slightly lower at 17.12.
• A price-to-sales ratio of 2.07 suggests that Masco is fairly valued compared to peers.
• Over the past 52 weeks, the stock has traded between $63.81 and $86.70, currently sitting near $72.
• The 50-day and 200-day moving averages are both around $76, meaning the stock is currently trading below its short- and long-term trend levels.

While it hasn’t kept pace with the broader market’s performance, Masco’s combination of a steady dividend, financial stability, and moderate valuation make it appealing for investors looking beyond short-term stock price movements.

Risks and Considerations

Every stock comes with risks, and Masco is no exception. Investors should be aware of a few key factors that could impact future performance.

• The company’s business is closely tied to the housing and renovation markets. If home improvement spending slows, revenue growth could take a hit.
• Higher interest rates can discourage home improvement projects, impacting demand for Masco’s products.
• Quarterly revenue saw a slight decline year-over-year. While margins remain healthy, stagnating revenue could limit future dividend growth potential.
• While debt levels are manageable, carrying over $3 billion in total debt means the company must carefully manage its financial obligations.

None of these risks are dealbreakers, but they’re important considerations for investors evaluating Masco’s long-term potential.

Final Thoughts

Masco may not be the highest-yielding dividend stock, but it offers a reliable and growing payout backed by strong cash flow and a disciplined financial approach.

• The 1.68% yield is modest but sustainable.
• A low payout ratio leaves room for continued dividend growth.
• The company’s strong financial health supports long-term stability.

For investors looking for a mix of income and capital appreciation in the home improvement sector, Masco presents a compelling case. It’s not the flashiest dividend stock out there, but for those who prioritize consistency and financial strength, it remains a solid choice.