Dividend.com: Eye on Fortune Brands

Fortune Brands Home Goods Drop, Liquor Sales Rise

Fortune Brands(FO Quote) just reported that its third-quarter profit rose 61%, as the company booked various one-time gains. The company reported EPS that came in 4 cents ahead of estimates, despite sales declining 10% to $1.92 billion.

The results included various one-time items, including a gain of 94 cents a share related to the early termination of the U.S. spirits distribution joint venture with V&S Group. The company saw a drop in demand for its home products, but some of its other brands experienced growth, such as Jim Beam and Maker's Mark bourbons, Courvoisier cognac, Titleist golf balls and Master Locks.

Management said the current economic environment will present near-term challenges as consumers navigate the global credit crisis and as the U.S. housing correction continues.

We had removed shares of FO from our "Recommended" list back on Aug. 19 when they were trading at $59.77. The company has a dividend yield of 5.05% based on last night's closing stock price of $34.85. The company is trading at 11 times the low end of 2009 estimates. The shares are getting very attractive at these levels and the dividend yield is also looking good. We are putting the stock on our upgrade watch list for a potential ratings upgrade. Fortune Brands is not recommended at this time, holding a Dividend.com Rating of 3.4 out of 5 stars.