NEW YORK (TheStreet) -- Shares of Masco Corp. (MAS) are higher by 4.93% to $24.47 at the start of trading on Tuesday, after the company announced it will be spinning off its services business into an independent, publicly traded company, in order to drive shareholder value.
"As separate companies, both Masco and the services business will have greater flexibility to focus on and pursue their respective growth strategies. In addition, the actions we are taking at the corporate office are intended to improve our cost position and drive value across our enterprise," company CEO Keith Allman said.
The company, which manufacturers, distributes, and installs home improvement and building products announced additional strategic initiatives including a share repurchase program for an aggregate of 50 million shares of common stock, and a reduction in corporate expenses with anticipated company-wide savings of $35 million to $40 million over the coming quarters.
Masco expects the separation to be completed by the middle of next year.
Separately, TheStreet Ratings team rates MASCO CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate MASCO CORP (MAS) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, good cash flow from operations, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."