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Stock Strategist

A New Wide-Moat Stock to Consider

Masco used acquisitions to become a powerhouse, but now it's slimming down.

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Since Keith Allman was named Masco's (MAS) CEO in February 2014, the global leader in home improvement and building products has shifted its focus from the less attractive installation, cabinetry, and windows businesses toward the more valuable plumbing and decorative architectural segments. This strategy has significantly strengthened Masco, and we like that its prospects now depend on two wide-moat businesses that primarily operate in the repair and remodel market, which is far less cyclical than new construction and has increased at a 5% average annual rate over the past two decades.

Masco’s plumbing and decorative architectural businesses have solid long-term growth prospects, and we expect them to continue creating shareholder value for at least the next 20 years. As a result, we've upgraded Masco's moat rating to wide.

Brian Bernard does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.