Fortune Brands: Unlocking Value Through Spin-Offs
Andrew D. Jones submits:
Fortune Brands Inc.
Andrew D. Jones, CFA
October 21, 2010
Price Target: $82 (37% upside plus 1.2% dividend yield)
Fortune Brands is a conglomerate comprising three divisions: spirits, golf products, and home and security products. The company offers various distilled spirits, including bourbon, tequila, Canadian whiskey, scotch whiskey, and cognacs under the Jim Beam (#1 bourbon), Maker’s Mark (#1 super-premium bourbon), Sauza (#2 tequila), Canadian Club, Laphroaig (#1 single Islay malt Scotch whiskey), and Courvoisier names. It also provides rum, sherries, port, gin, whiskey, and bitters under the Teacher’s, Cruzan, Harveys, Cockburn’s, Larios, Whiskey DYC, and Kuemmerling names. In fiscal 2009, the spirits division reported $485 million in operating profit on $2,500 million in sales. The spirits division accounts for about two-thirds of Fortune's profit. The home and security division includes MasterBrand cabinets, Moen faucets, Therma-Tru doors, Simonton windows, and the MasterLock and Waterloo product lines.Complete Story »