What: Shares of home-improvement manufacturer Masco Corp jumped as much as 12% today after the company reported earnings.
So what: Second-quarter revenue was up 3% to $1.9 billion, but would have risen 7% if not for the drag of currency translation. Operating profit jumped 22% to $280 million and adjusted earnings per share rose 36% to $0.38.
The top-line results were lower than the $2.22 billion Wall Street had expected, but earnings per share beat expectations by $0.02, and that's where the market's focus is today.
Now what: The North American building market continues to be strong, and sales in the region were up 7%, highlighting the company's growth. But gains were broad across the company, and management had enough confidence in operations to increase the stock's annual dividend by $0.02 to $0.38 per share beginning in the fourth quarter of 2015.
Strong profitability with an implied dividend yield of 1.5% and a trailing P/E ratio of 23 are reasonable valuations in a strong building market. With results like this, I think the stock still has further to climb.
The article Why Shares of Masco Corp Climbed 12% Today originally appeared on Fool.com.
Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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