NYSE:MAS
MASCO CORP /DE/
A leading North American provider of residential plumbing fixtures, HVAC systems, and kitchen solutions with a strong balance sheet and consistent cash flow generation.
Key Metrics
Investment Thesis
Bull Case
Masco offers a defensive play on the housing sector with recurring revenue from essential plumbing and HVAC replacements that remain resilient during economic slowdowns. The stock provides attractive total return potential through a combination of dividend yield ($261M payout) and share buybacks ($571M), supported by strong free cash flow conversion (858M net profit vs 1.02B CFO). Strategic acquisitions in HVAC could drive future growth as energy efficiency becomes a priority for homeowners.
Bear Case
Revenue has declined consistently over the past five years, dropping from $8.68B in 2022 to $7.56B in 2025, signaling potential secular headwinds or market share erosion. High leverage with $2.94B in long-term debt against only $76M in shareholders' equity creates significant financial risk during rising interest rate environments. The company faces intense competition from low-cost manufacturers and private label brands that could further compress already thin margins.
About MASCO CORP /DE/
Masco Corporation serves residential and commercial markets through its plumbing, heating, air conditioning (HVAC), and kitchen & bath segments. The company designs, manufactures, and distributes high-quality products while offering related services to contractors and homeowners. Its diverse portfolio allows it to capitalize on housing trends and infrastructure development opportunities.
Analysis
Management Discussion
Masco delivered net profit of $858M in 2025, maintaining profitability despite a revenue contraction from $7.97B to $7.56B over the last two years. Operating cash flow remained robust at $1.02B, supporting significant capital returns including $261M in dividends and $571M in share repurchases. The company successfully navigated inflationary pressures while preserving its strong balance sheet with $647M in cash.
Industry Overview
The home improvement industry is cyclical but resilient, driven by housing starts, remodeling activity, and the need for essential maintenance like plumbing and heating repairs. Consumers increasingly prioritize energy-efficient products, creating opportunities for premium HVAC solutions but also intensifying competition on price. Market consolidation continues as smaller players struggle with supply chain disruptions and rising input costs.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $8.68B | $7.97B | $7.83B | $7.56B |
| Cost of Revenue | $5.97B | $5.13B | $5.00B | $4.88B |
| Gross Profit | $2.71B | $2.84B | $2.83B | $2.68B |
| Operating Expenses | $1.42B | $1.49B | $1.47B | $1.43B |
| Operating Income | $1.30B | $1.35B | $1.36B | $1.25B |
| G&A | $1.39B | $1.47B | $1.47B | $1.43B |
| Stock-Based Comp | $49.0M | $31.0M | $39.0M | $30.0M |
| D&A | $145.0M | $149.0M | $150.0M | $148.0M |
| Depreciation | $112.0M | $115.0M | $118.0M | $126.0M |
| Amortization | $29.0M | $31.0M | $29.0M | $20.0M |
| Other OpEx | $26.0M | $15.0M | $0 | $5.0M |
| Non-Operating Income | $-104.0M | $-110.0M | $-202.0M | $-113.0M |
| Interest Expense | $108.0M | $106.0M | — | — |
| Pre-Tax Income | $1.19B | $1.24B | $1.16B | $1.14B |
| Income Tax | $288.0M | $278.0M | $287.0M | $277.0M |
| Continuing Ops | $905.0M | $960.0M | $874.0M | $858.0M |
| Discontinued Ops | $0 | $0 | $0 | $0 |
| Net Income | $905.0M | $960.0M | $874.0M | $858.0M |
| Minority Interest | $61.0M | $52.0M | $52.0M | $48.0M |
| Net to Common | $844.0M | $908.0M | $822.0M | $810.0M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $2.95B | $2.86B | $2.73B | $2.84B |
| Cash & Equivalents | $452.0M | $634.0M | $634.0M | $647.0M |
| Inventory | $1.24B | $1.02B | $938.0M | $1.05B |
| Prepaid Expenses | $109.0M | $110.0M | $123.0M | $119.0M |
| Other Current Assets | $1.15B | $1.09B | $1.03B | $1.03B |
| Long-Term Assets | $2.24B | $2.51B | $2.29B | $2.36B |
| PP&E (Net) | $975.0M | $1.12B | — | — |
| Intangibles | $350.0M | $377.0M | $220.0M | $205.0M |
| Goodwill | $537.0M | $604.0M | $597.0M | $623.0M |
| Operating Leases | $266.0M | $268.0M | $231.0M | $233.0M |
| Other LT Assets | $103.0M | $137.0M | $1.24B | $1.30B |
| Total Assets | $5.19B | $5.36B | $5.02B | $5.20B |
| Current Liabilities | $1.89B | $1.70B | $1.56B | $1.57B |
| Accounts Payable | $877.0M | $840.0M | $789.0M | $810.0M |
| Current Leases | $39.0M | $44.0M | $43.0M | $47.0M |
| Taxes Payable | $48.0M | $32.0M | $28.0M | $17.0M |
| Other Current Liab | $118.0M | $-73.0M | $-67.0M | $-62.0M |
| Long-Term Liabilities | $3.54B | $3.55B | $3.51B | $3.55B |
| Long-Term Debt | $2.95B | $2.94B | $2.94B | $2.94B |
| LT Operating Leases | $255.0M | $258.0M | $223.0M | $221.0M |
| Other LT Liab | $339.0M | $349.0M | $341.0M | $386.0M |
| Total Liabilities | $5.43B | $5.25B | $5.07B | $5.12B |
| Shareholders' Equity | $-242.0M | $116.0M | $-53.0M | $76.0M |
| Paid-In Capital | $16.0M | $0 | $0 | $0 |
| Retained Earnings | $-947.0M | $-596.0M | $-693.0M | $-688.0M |
| AOCI | $226.0M | $249.0M | $201.0M | $298.0M |
| Total L&E | $5.19B | $5.36B | $5.02B | $5.20B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $905.0M | $960.0M | $874.0M | $858.0M |
| Non-Cash Adjustments | $102.0M | $762.0M | $261.0M | $116.0M |
| Working Capital Changes | $-167.0M | $-309.0M | $-60.0M | $48.0M |
| Cash from Operations | $840.0M | $1.41B | $1.07B | $1.02B |
| Cash from Investing | $-230.0M | $-383.0M | $-50.0M | $-144.0M |
| Debt Repayments | $10.0M | — | — | — |
| Share Buybacks | $914.0M | $353.0M | $751.0M | $571.0M |
| Dividends Paid | $258.0M | $257.0M | $254.0M | $261.0M |
| Cash from Financing | $-1.07B | $-854.0M | $-1.02B | $-888.0M |
| FX Effect | $-18.0M | $6.0M | $-9.0M | $25.0M |
| Net Change in Cash | $-474.0M | $182.0M | $-1.0M | $14.0M |
| Beginning Cash | $926.0M | $452.0M | $634.0M | $634.0M |
| Ending Cash | $452.0M | $634.0M | $634.0M | $647.0M |
Frequently Asked Questions
How does MASCO CORP /DE/ make money?
The company operates through three primary segments: Plumbing Products (faucets, showers, bathtubs), Heating & Air Conditioning (ductless mini-splits, furnaces), and Kitchen & Bath (countertops, cabinetry). Revenue of $7.56B in 2025 reflects a diversified mix of manufactured goods and distribution services across these core categories.
What are the main risks for MAS?
Declining housing starts and renovation spending could pressure revenue growth, as seen in the recent sequential decline from $8.68B to $7.56B over five years. Rising raw material costs (copper, steel, plastic) may erode gross margins if not effectively passed to customers. High levels of debt ($2.94B long-term) increase interest rate sensitivity and leverage ratios. Economic downturns could reduce discretionary spending on home improvement projects.
What is MAS's competitive advantage?
Strong brand recognition for premium and mid-tier brands provides pricing power and customer loyalty in the residential market. A vertically integrated supply chain and extensive dealer network ensure reliable product availability and service support. Consistent free cash flow generation ($1.02B in 2025) enables robust capital returns via dividends and share repurchases.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.