Masco (NYSE: MAS) manufactures home improvement products and building supplies such as cabinetry, paints and plumbing fixtures. The company also offers installation services. Some brands owned by Masco are Kraftmaid, Delta, Peerless, Aqua Glass, Mirolin, and Behr. The company earned $7.8 billion in net sales but incurred a net loss of $140 million in 2009.
Masco's fortunes are closely linked to the U.S. housing market (80% of the company's sales come from North America), as the majority of its sales are related to new home construction and existing home sales. A weak housing market means more foreclosures, which means that home construction declines. Masco's sales depend on new housing construction because it provides many home builders with the materials they need to build a home. A weak housing market and a slow economy also means that homeowners are less likely to spend money on home improvement projects. As a result of the sluggish housing market, the company's net sales fell by 18% in 2009.
Sales of older homes also influence the company's performance. As sellers seek to increase the sale price and new owners seek to improve their purchase. In a down market, however, owners typically hold off on major projects because of the decrease in equity in existing houses.
The home improvement and construction supply market is very fragmented, with many large and small players, and is subject to increasing global competition. Masco is the largest player in the construction services segment and the largest buyer of insulation material in the world. Some of the company’s most significant competitors are outlined below.