BROOKFIELD BUSINESS PT-UNIT (BBU) Stock Fundamental Analysis
NYSE:BBU - New York Stock Exchange, Inc. - BMG162341090
Overall BBU gets a fundamental rating of 5 out of 10. We evaluated BBU against 8 industry peers in the Industrial Conglomerates industry. While BBU has a great profitability rating, there are quite some concerns on its financial health. BBU is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
BBU had positive earnings in the past year.
BBU had a positive operating cash flow in the past year.
BBU had positive earnings in 4 of the past 5 years.
BBU had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
BBU's Return On Assets of 0.75% is fine compared to the rest of the industry. BBU outperforms 62.50% of its industry peers.
BBU's Return On Equity of 30.35% is fine compared to the rest of the industry. BBU outperforms 75.00% of its industry peers.
BBU has a Return On Invested Capital of 4.91%. This is in the better half of the industry: BBU outperforms 62.50% of its industry peers.
BBU had an Average Return On Invested Capital over the past 3 years of 3.65%. This is significantly below the industry average of 9.51%.
The last Return On Invested Capital (4.91%) for BBU is above the 3 year average (3.65%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.75% | ||
| ROE | 30.35% | ||
| ROIC | 4.91% |
ROA(3y)0.34%
ROA(5y)0.19%
ROE(3y)13.09%
ROE(5y)7.31%
ROIC(3y)3.65%
ROIC(5y)3.73%
1.3 Margins
BBU has a Profit Margin of 1.29%. This is in the better half of the industry: BBU outperforms 62.50% of its industry peers.
In the last couple of years the Profit Margin of BBU has grown nicely.
BBU has a Operating Margin of 9.09%. This is in the better half of the industry: BBU outperforms 62.50% of its industry peers.
BBU's Operating Margin has improved in the last couple of years.
BBU's Gross Margin of 11.83% is on the low side compared to the rest of the industry. BBU is outperformed by 62.50% of its industry peers.
In the last couple of years the Gross Margin of BBU has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.09% | ||
| PM (TTM) | 1.29% | ||
| GM | 11.83% |
OM growth 3Y5.59%
OM growth 5Y7.59%
PM growth 3YN/A
PM growth 5Y34.47%
GM growth 3Y-12.83%
GM growth 5Y1.91%
2. Health
2.1 Basic Checks
BBU has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for BBU has been reduced compared to 1 year ago.
The number of shares outstanding for BBU has been increased compared to 5 years ago.
The debt/assets ratio for BBU has been reduced compared to a year ago.
2.2 Solvency
The Debt to FCF ratio of BBU is 205.54, which is on the high side as it means it would take BBU, 205.54 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 205.54, BBU is in line with its industry, outperforming 50.00% of the companies in the same industry.
BBU has a Debt/Equity ratio of 20.33. This is a high value indicating a heavy dependency on external financing.
BBU has a worse Debt to Equity ratio (20.33) than 62.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 20.33 | ||
| Debt/FCF | 205.54 | ||
| Altman-Z | N/A |
ROIC/WACC0.81
WACC6.05%
2.3 Liquidity
BBU has a Current Ratio of 1.17. This is a normal value and indicates that BBU is financially healthy and should not expect problems in meeting its short term obligations.
BBU's Current ratio of 1.17 is in line compared to the rest of the industry. BBU outperforms 50.00% of its industry peers.
A Quick Ratio of 0.95 indicates that BBU may have some problems paying its short term obligations.
The Quick ratio of BBU (0.95) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.17 | ||
| Quick Ratio | 0.95 |
3. Growth
3.1 Past
BBU shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 2848.52%, which is quite impressive.
The Earnings Per Share has been growing by 42.02% on average over the past years. This is a very strong growth
Looking at the last year, BBU shows a very negative growth in Revenue. The Revenue has decreased by -17.10% in the last year.
BBU shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 8.18% yearly.
EPS 1Y (TTM)2848.52%
EPS 3YN/A
EPS 5Y42.02%
EPS Q2Q%795%
Revenue 1Y (TTM)-17.1%
Revenue growth 3Y13.53%
Revenue growth 5Y8.18%
Sales Q2Q%-35.88%
3.2 Future
The Earnings Per Share is expected to decrease by -66.51% on average over the next years. This is quite bad
The Revenue is expected to grow by 11.74% on average over the next years. This is quite good.
EPS Next Y-73.93%
EPS Next 2Y-66.51%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year1.33%
Revenue Next 2Y11.74%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 2.66, the valuation of BBU can be described as very cheap.
BBU's Price/Earnings ratio is rather cheap when compared to the industry. BBU is cheaper than 100.00% of the companies in the same industry.
When comparing the Price/Earnings ratio of BBU to the average of the S&P500 Index (27.96), we can say BBU is valued rather cheaply.
A Price/Forward Earnings ratio of 30.05 indicates a quite expensive valuation of BBU.
Based on the Price/Forward Earnings ratio, BBU is valued a bit cheaper than the industry average as 62.50% of the companies are valued more expensively.
BBU's Price/Forward Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 24.11.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 2.66 | ||
| Fwd PE | 30.05 |
4.2 Price Multiples
87.50% of the companies in the same industry are more expensive than BBU, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, BBU is valued a bit cheaper than 75.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 14.99 | ||
| EV/EBITDA | 5.46 |
4.3 Compensation for Growth
BBU has a very decent profitability rating, which may justify a higher PE ratio.
A cheap valuation may be justified as BBU's earnings are expected to decrease with -66.51% in the coming years.
PEG (NY)N/A
PEG (5Y)0.06
EPS Next 2Y-66.51%
EPS Next 3YN/A
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.41%, BBU has a reasonable but not impressive dividend return.
BBU's Dividend Yield is a higher than the industry average which is at 5.52.
BBU's Dividend Yield is slightly below the S&P500 average, which is at 2.29.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.41% |
5.2 History
The dividend of BBU decreases each year by -45.77%.
BBU has been paying a dividend for over 5 years, so it has already some track record.
BBU has decreased its dividend recently.
Dividend Growth(5Y)-45.77%
Div Incr Years0
Div Non Decr Years1
5.3 Sustainability
3.16% of the earnings are spent on dividend by BBU. This is a low number and sustainable payout ratio.
BBU's earnings and Dividend Rate are declining. This means the current dividend is most likely not sustainable.
DP3.16%
EPS Next 2Y-66.51%
EPS Next 3YN/A
BROOKFIELD BUSINESS PT-UNIT
NYSE:BBU (1/17/2025, 8:04:00 PM)
21.55
-0.23 (-1.06%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryIndustrial Conglomerates
Earnings (Last)
Earnings (Next)
Inst Owners78.17%
Inst Owner Change0.13%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap3.10B
Analysts80
Price Target22.42 (4.04%)
Short Float %0.04%
Short Ratio1.83
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.41% |
Yearly Dividend0.26
Dividend Growth(5Y)-45.77%
DP3.16%
Div Incr Years0
Div Non Decr Years1
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)440.59%
Min EPS beat(2)-395.05%
Max EPS beat(2)1276.24%
EPS beat(4)3
Avg EPS beat(4)249.23%
Min EPS beat(4)-395.05%
Max EPS beat(4)1276.24%
EPS beat(8)N/A
Avg EPS beat(8)N/A
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)0
Avg Revenue beat(2)-36.92%
Min Revenue beat(2)-47.12%
Max Revenue beat(2)-26.72%
Revenue beat(4)0
Avg Revenue beat(4)-29.8%
Min Revenue beat(4)-47.12%
Max Revenue beat(4)-19.79%
Revenue beat(8)N/A
Avg Revenue beat(8)N/A
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)0%
PT rev (3m)0%
EPS NQ rev (1m)0%
EPS NQ rev (3m)109.56%
EPS NY rev (1m)0%
EPS NY rev (3m)334.21%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)0%
Revenue NY rev (3m)0%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 2.66 | ||
| Fwd PE | 30.05 | ||
| P/S | 0.07 | ||
| P/FCF | 14.99 | ||
| P/OCF | 1.13 | ||
| P/B | 1.57 | ||
| P/tB | N/A | ||
| EV/EBITDA | 5.46 |
EPS(TTM)8.09
EY37.54%
EPS(NY)0.72
Fwd EY3.33%
FCF(TTM)1.44
FCFY6.67%
OCF(TTM)19.08
OCFY88.56%
SpS323.62
BVpS13.75
TBVpS-214.56
PEG (NY)N/A
PEG (5Y)0.06
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.75% | ||
| ROE | 30.35% | ||
| ROCE | 6.22% | ||
| ROIC | 4.91% | ||
| ROICexc | 5.19% | ||
| ROICexgc | 10.61% | ||
| OM | 9.09% | ||
| PM (TTM) | 1.29% | ||
| GM | 11.83% | ||
| FCFM | 0.44% |
ROA(3y)0.34%
ROA(5y)0.19%
ROE(3y)13.09%
ROE(5y)7.31%
ROIC(3y)3.65%
ROIC(5y)3.73%
ROICexc(3y)3.9%
ROICexc(5y)4.02%
ROICexgc(3y)8.4%
ROICexgc(5y)8%
ROCE(3y)4.66%
ROCE(5y)4.77%
ROICexcg growth 3Y9.49%
ROICexcg growth 5Y-8.93%
ROICexc growth 3Y1.4%
ROICexc growth 5Y-11.28%
OM growth 3Y5.59%
OM growth 5Y7.59%
PM growth 3YN/A
PM growth 5Y34.47%
GM growth 3Y-12.83%
GM growth 5Y1.91%
F-Score6
Asset Turnover0.58
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 20.33 | ||
| Debt/FCF | 205.54 | ||
| Debt/EBITDA | 5.33 | ||
| Cap/Depr | 76.63% | ||
| Cap/Sales | 5.45% | ||
| Interest Coverage | 1.24 | ||
| Cash Conversion | 36.39% | ||
| Profit Quality | 34.44% | ||
| Current Ratio | 1.17 | ||
| Quick Ratio | 0.95 | ||
| Altman-Z | N/A |
F-Score6
WACC6.05%
ROIC/WACC0.81
Cap/Depr(3y)60.48%
Cap/Depr(5y)62.63%
Cap/Sales(3y)3.44%
Cap/Sales(5y)3.37%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)2848.52%
EPS 3YN/A
EPS 5Y42.02%
EPS Q2Q%795%
EPS Next Y-73.93%
EPS Next 2Y-66.51%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)-17.1%
Revenue growth 3Y13.53%
Revenue growth 5Y8.18%
Sales Q2Q%-35.88%
Revenue Next Year1.33%
Revenue Next 2Y11.74%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y20.48%
EBIT growth 3Y19.88%
EBIT growth 5Y16.39%
EBIT Next Year-30.32%
EBIT Next 3Y-18.12%
EBIT Next 5YN/A
FCF growth 1Y153.91%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y130.15%
OCF growth 3Y-20.29%
OCF growth 5Y9.7%