Strong Cash Yield: Is Fortune Brands Innovations Stock A Buy?

Fortune Brands Innovations (FBIN) could be a good pick for your portfolio, with its high cash yield, good fundamentals, and discounted valuation. Companies like this can use cash to fuel additional revenue growth, or simply pay their shareholders through dividends or buybacks. Either move makes them attractive to the market

What Is Happening With FBIN

FBIN stock is currently trading at P/S (Price-to-Sales) ratio that is at a meaningful discount to its 3-month and 2-year highs, and also below its 3-year average.

Here is what’s going well for the company. Fortune Brands Innovations delivered $60 million in 2025 cost savings and targets an additional $35 million by year-end 2026. Its digital offerings, like Flo, achieved over 50% growth in 2025, expanding partnerships with insurers. The Security segment also saw a 6% sales increase in Q4 2025, driven by higher volume and pricing. While 2026 sales guidance is flat to 2%, newly appointed CEO Amit Banati will prioritize efficiency and margin improvement amid continued market outperformance.

FBIN Has Good Fundamentals

• Good Cash Yield: Not many stocks offer free cash flow yield of 6.1%, but Fortune Brands Innovations stock does
• Strong Margin: Last 12 month operating margin of 14.8%
• Growth: Last 12 revenue growth of -3.8% – revenue decline, but this selection is all about high yield and margin
• Valuation: FBIN stock currently trading at 38% below 2Y high, 15% below 1M high, and at a PS lower than 3Y average.

Below is a quick comparison of FBIN fundamentals with S&P medians.

*LTM: Last Twelve Months

But What Is The Risk Involved?

While FBIN stock may be a compelling investment opportunity, it’s always helpful to be aware of a stock’s history of drawdown. FBIN lost about 50% during the 2018 correction, just over 52% in the Covid pandemic selloff, and around 51% in the inflation shock. Even with strong fundamentals, this stock shows it can still take a hefty hit when markets turn sour. Good quality matters, but sharp downturns don’t discriminate much. But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read FBIN Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

For more details and our view, see Buy or Sell FBIN Stock.

Stocks Like FBIN

Not ready to act on FBIN? Consider these alternatives:

1. Broadridge Financial Solutions (BR)
2. Etsy (ETSY)
3. Oscar Health (OSCR)

We chose these stocks using the following criteria:

1. Greater than $2 Bil in market cap
2. Dipped last month & meaningfully below 2Y high
3. Current P/S < last few year average
4. Strong operating margin with no instances of large margin collapse
5. High free cash flow yield

A portfolio of stocks with the criteria above would have performed has follows since 12/31/2016:

• Average 6-month and 12-month forward returns of 10.4% and 20.4% respectively
• Win rate (percentage of picks returning positive) of about 74% for 12-month period
• Strategy consistent across market cycles

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