MasterBrand, Inc. (NYSE: MBC)

Sector: Consumer Cyclical Industry: Furnishings, Fixtures & Appliances CIK: 0001941365
Market Cap 1.47 Bn
P/B 1.10
P/E 55.19
P/S 0.54
ROIC (Qtr) 4.63
Div Yield % 0.00
Rev 1y % (Qtr) -3.46
Total Debt (Qtr) 1.17 Bn
Debt/Equity (Qtr) 0.87
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About

Investment thesis

Bull case

  • Healthy cash reserves of 183.30M provide 7.54x coverage of short-term debt 24.30M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 195.70M provides strong 12.16x coverage of stock compensation 16.10M, indicating sustainable incentive practices.
  • Robust free cash flow of 117.50M exceeds capital expenditure of 78.20M by 1.50x, indicating strong organic growth funding capability.
  • Operating cash flow of 195.70M fully covers other non-current liabilities 190.40M by 1.03x, showing strong long-term stability.
  • Cash reserves of 183.30M provide ample 48.24x coverage of acquisition spending 3.80M, enabling strategic growth opportunities.

Bear case

  • Operating cash flow of 195.70M barely covers its investment activities of (74.40M), with a coverage ratio of -2.63, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating earnings of 120.40M show weak coverage of depreciation charges of 93.50M, with a 1.29 ratio indicating high capital intensity and potential reinvestment needs.
  • High depreciation of 93.50M relative to operating cash flow of 195.70M, which is 0.48x suggests significant maintenance capital requirements affecting free cash flow.
  • Free cash flow of 117.50M represents just -3.36x of debt issuance (35M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Operating cash flow of 195.70M is outpaced by equity issuance of (18.10M) (-10.81 ratio), indicating concerning reliance on equity markets for funding operations.

Peer comparison

Companies in the Furnishings, Fixtures & Appliances
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SGI Somnigroup International Inc. 18.99 Bn 125.40 7.03 6.62 Bn
2 SN SharkNinja, Inc. 18.48 Bn 32.14 3.04 0.89 Bn
3 MHK Mohawk Industries Inc 8.23 Bn 19.54 0.77 2.34 Bn
4 PATK Patrick Industries Inc 5.10 Bn 175.24 10.70 1.53 Bn
5 WHR Whirlpool Corp /De/ 4.88 Bn 15.36 0.31 7.19 Bn
6 HNI Hni Corp 2.23 Bn 44.66 1.16 0.46 Bn
7 TILE Interface Inc 2.17 Bn 30.23 2.24 0.39 Bn
8 LEG Leggett & Platt Inc 1.59 Bn 5.64 0.39 1.66 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.79 0.98
EV to Cash from Ops. EV/CFO 12.44 -9.92
EV to Debt EV to Debt 2.07 25.70
EV to EBIT EV/EBIT 20.22 17.69
EV to EBITDA EV/EBITDA 11.46 15.96
EV to Free Cash Flow [EV/FCF] EV/FCF 20.72 17.28
EV to Market Cap EV to Market Cap 1.65 1.76
EV to Revenue EV/Rev 0.89 1.40
Price to Book Value [P/B] P/B 1.10 9.34
Price to Earnings [P/E] P/E 55.19 16.89
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 1.74
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 9.37
Dividend per Basic Share Div per Share (Qtr) 0.00 0.51
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 28.74
Interest Coverage Int. cover (Qtr) 1.62 -23.23
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 3.34 -9.80
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 51.99 70.23
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.00
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -61.69 -367.80
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -32.11 -34.93
EBIT Growth (1y) % EBIT 1y % (Qtr) -50.31 -198.55
EBT Growth (1y) % EBT 1y % (Qtr) -72.49 -72.49
EPS Growth (1y) % EPS 1y % (Qtr) -78.79 -131.79
FCF Growth (1y) % FCF 1y % (Qtr) -44.34 0.53
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -5.63 -2.36
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.88 1.16
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.13
Cash Ratio Cash Ratio (Qtr) 0.44 0.30
Current Ratio Curr Ratio (Qtr) 1.67 1.96
Debt to Equity Ratio Debt/Equity (Qtr) 0.87 0.57
Interest Cover Ratio Int Coverage (Qtr) 1.62 -23.23
Times Interest Earned Times Interest Earned (Qtr) 1.62 -23.23
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 7.80 -2.26
EBIT Margin % EBIT Margin % (Qtr) 4.40 -4.46
EBT Margin % EBT Margin % (Qtr) 1.69 -7.49
Gross Margin % Gross Margin % (Qtr) 30.30 33.73
Net Profit Margin % Net Margin % (Qtr) 1.00 -8.04