BROWN-FORMAN CORP-CLASS A (BF.A) Stock Fundamental Analysis
NYSE:BF.A - New York Stock Exchange, Inc. - US1156371007 - Common Stock - Currency: USD
BF.A gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 31 industry peers in the Beverages industry. While BF.A has a great profitability rating, there are some minor concerns on its financial health. BF.A has a valuation in line with the averages, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
BF.A had positive earnings in the past year.
In the past year BF.A had a positive cash flow from operations.
Each year in the past 5 years BF.A has been profitable.
BF.A had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
BF.A has a Return On Assets of 12.05%. This is amongst the best in the industry. BF.A outperforms 85.71% of its industry peers.
BF.A's Return On Equity of 27.10% is fine compared to the rest of the industry. BF.A outperforms 75.00% of its industry peers.
Looking at the Return On Invested Capital, with a value of 11.99%, BF.A is in line with its industry, outperforming 57.14% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for BF.A is in line with the industry average of 13.34%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.05% | ||
| ROE | 27.1% | ||
| ROIC | 11.99% |
ROA(3y)11.92%
ROA(5y)12.79%
ROE(3y)27.9%
ROE(5y)31.91%
ROIC(3y)14.71%
ROIC(5y)14.95%
1.3 Margins
BF.A has a better Profit Margin (24.61%) than 96.43% of its industry peers.
In the last couple of years the Profit Margin of BF.A has remained more or less at the same level.
The Operating Margin of BF.A (27.51%) is better than 85.71% of its industry peers.
BF.A's Operating Margin has declined in the last couple of years.
Looking at the Gross Margin, with a value of 59.21%, BF.A is in the better half of the industry, outperforming 78.57% of the companies in the same industry.
BF.A's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 27.51% | ||
| PM (TTM) | 24.61% | ||
| GM | 59.21% |
OM growth 3Y-2.74%
OM growth 5Y-4.4%
PM growth 3Y-2.06%
PM growth 5Y-0.49%
GM growth 3Y-0.02%
GM growth 5Y-1.49%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), BF.A is creating value.
Compared to 1 year ago, BF.A has less shares outstanding
BF.A has less shares outstanding than it did 5 years ago.
The debt/assets ratio for BF.A is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 3.99 indicates that BF.A is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.99, BF.A is in the better half of the industry, outperforming 71.43% of the companies in the same industry.
BF.A has a debt to FCF ratio of 6.99. This is a slightly negative value and a sign of low solvency as BF.A would need 6.99 years to pay back of all of its debts.
BF.A has a Debt to FCF ratio (6.99) which is comparable to the rest of the industry.
BF.A has a Debt/Equity ratio of 0.78. This is a neutral value indicating BF.A is somewhat dependend on debt financing.
BF.A has a Debt to Equity ratio of 0.78. This is comparable to the rest of the industry: BF.A outperforms 46.43% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.78 | ||
| Debt/FCF | 6.99 | ||
| Altman-Z | 3.99 |
ROIC/WACC1.48
WACC8.1%
2.3 Liquidity
A Current Ratio of 2.70 indicates that BF.A has no problem at all paying its short term obligations.
BF.A's Current ratio of 2.70 is fine compared to the rest of the industry. BF.A outperforms 71.43% of its industry peers.
A Quick Ratio of 1.05 indicates that BF.A should not have too much problems paying its short term obligations.
With a decent Quick ratio value of 1.05, BF.A is doing good in the industry, outperforming 60.71% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.7 | ||
| Quick Ratio | 1.05 |
3. Growth
3.1 Past
BF.A shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 27.71%, which is quite impressive.
The Earnings Per Share has been growing slightly by 4.35% on average over the past years.
The Revenue has decreased by -4.52% in the past year.
The Revenue has been growing slightly by 4.68% on average over the past years.
EPS 1Y (TTM)27.71%
EPS 3Y10.18%
EPS 5Y4.35%
EPS Q2Q%10%
Revenue 1Y (TTM)-4.52%
Revenue growth 3Y6.48%
Revenue growth 5Y4.68%
Sales Q2Q%-1.08%
3.2 Future
BF.A is expected to show a decrease in Earnings Per Share. In the coming years, the EPS will decrease by -0.53% yearly.
The Revenue is expected to grow by 1.81% on average over the next years.
EPS Next Y-14.36%
EPS Next 2Y-5.31%
EPS Next 3Y-0.53%
EPS Next 5YN/A
Revenue Next Year-2.91%
Revenue Next 2Y-0.07%
Revenue Next 3Y1.81%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
BF.A is valuated correctly with a Price/Earnings ratio of 15.23.
BF.A's Price/Earnings ratio is a bit cheaper when compared to the industry. BF.A is cheaper than 75.00% of the companies in the same industry.
When comparing the Price/Earnings ratio of BF.A to the average of the S&P500 Index (29.63), we can say BF.A is valued slightly cheaper.
The Price/Forward Earnings ratio is 16.82, which indicates a correct valuation of BF.A.
Compared to the rest of the industry, the Price/Forward Earnings ratio of BF.A indicates a somewhat cheap valuation: BF.A is cheaper than 60.71% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of BF.A to the average of the S&P500 Index (22.68), we can say BF.A is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.23 | ||
| Fwd PE | 16.82 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of BF.A is on the same level as its industry peers.
BF.A's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 33.31 | ||
| EV/EBITDA | 14.09 |
4.3 Compensation for Growth
BF.A has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)3.5
EPS Next 2Y-5.31%
EPS Next 3Y-0.53%
5. Dividend
5.1 Amount
BF.A has a Yearly Dividend Yield of 2.92%. Purely for dividend investing, there may be better candidates out there.
The stock price of BF.A dropped by -21.33% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
BF.A's Dividend Yield is a higher than the industry average which is at 3.25.
Compared to an average S&P500 Dividend Yield of 2.27, BF.A pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.92% |
5.2 History
The dividend of BF.A has a limited annual growth rate of 5.58%.
BF.A has been paying a dividend for at least 10 years, so it has a reliable track record.
The dividend of BF.A decreased recently.
Dividend Growth(5Y)5.58%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
BF.A pays out 41.14% of its income as dividend. This is a bit on the high side, but may be sustainable.
DP41.14%
EPS Next 2Y-5.31%
EPS Next 3Y-0.53%
32.28
+0.96 (+3.07%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryBeverages
Earnings (Last)
Earnings (Next)
Inst Owners61.05%
Inst Owner Change0.94%
Ins Owners0.39%
Ins Owner ChangeN/A
Market Cap15.26B
Analysts55.83
Price Target46.21 (43.15%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.92% |
Yearly Dividend0.85
Dividend Growth(5Y)5.58%
DP41.14%
Div Incr Years1
Div Non Decr Years1
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-1.37%
Min EPS beat(2)-12.45%
Max EPS beat(2)9.71%
EPS beat(4)3
Avg EPS beat(4)7.99%
Min EPS beat(4)-12.45%
Max EPS beat(4)30.61%
EPS beat(8)3
Avg EPS beat(8)-3.99%
EPS beat(12)6
Avg EPS beat(12)-1.28%
EPS beat(16)7
Avg EPS beat(16)-3.01%
Revenue beat(2)0
Avg Revenue beat(2)-3.34%
Min Revenue beat(2)-6.49%
Max Revenue beat(2)-0.18%
Revenue beat(4)0
Avg Revenue beat(4)-5.27%
Min Revenue beat(4)-8.1%
Max Revenue beat(4)-0.18%
Revenue beat(8)2
Avg Revenue beat(8)-2.77%
Revenue beat(12)5
Avg Revenue beat(12)-0.14%
Revenue beat(16)7
Avg Revenue beat(16)0.03%
PT rev (1m)-3.59%
PT rev (3m)-5.22%
EPS NQ rev (1m)-4.21%
EPS NQ rev (3m)-1.61%
EPS NY rev (1m)-0.43%
EPS NY rev (3m)0.04%
Revenue NQ rev (1m)-1.61%
Revenue NQ rev (3m)-1.61%
Revenue NY rev (1m)-0.12%
Revenue NY rev (3m)-0.26%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.23 | ||
| Fwd PE | 16.82 | ||
| P/S | 3.74 | ||
| P/FCF | 33.31 | ||
| P/OCF | 22.47 | ||
| P/B | 4.12 | ||
| P/tB | 12.33 | ||
| EV/EBITDA | 14.09 |
EPS(TTM)2.12
EY6.57%
EPS(NY)1.92
Fwd EY5.94%
FCF(TTM)0.97
FCFY3%
OCF(TTM)1.44
OCFY4.45%
SpS8.63
BVpS7.84
TBVpS2.62
PEG (NY)N/A
PEG (5Y)3.5
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.05% | ||
| ROE | 27.1% | ||
| ROCE | 16.55% | ||
| ROIC | 11.99% | ||
| ROICexc | 12.72% | ||
| ROICexgc | 19.84% | ||
| OM | 27.51% | ||
| PM (TTM) | 24.61% | ||
| GM | 59.21% | ||
| FCFM | 11.23% |
ROA(3y)11.92%
ROA(5y)12.79%
ROE(3y)27.9%
ROE(5y)31.91%
ROIC(3y)14.71%
ROIC(5y)14.95%
ROICexc(3y)16.39%
ROICexc(5y)17.15%
ROICexgc(3y)25.33%
ROICexgc(5y)25.78%
ROCE(3y)19.43%
ROCE(5y)19.94%
ROICexcg growth 3Y-4.95%
ROICexcg growth 5Y-6.95%
ROICexc growth 3Y-7.74%
ROICexc growth 5Y-8.21%
OM growth 3Y-2.74%
OM growth 5Y-4.4%
PM growth 3Y-2.06%
PM growth 5Y-0.49%
GM growth 3Y-0.02%
GM growth 5Y-1.49%
F-Score5
Asset Turnover0.49
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.78 | ||
| Debt/FCF | 6.99 | ||
| Debt/EBITDA | 2.4 | ||
| Cap/Depr | 245.56% | ||
| Cap/Sales | 5.42% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 56.02% | ||
| Profit Quality | 45.62% | ||
| Current Ratio | 2.7 | ||
| Quick Ratio | 1.05 | ||
| Altman-Z | 3.99 |
F-Score5
WACC8.1%
ROIC/WACC1.48
Cap/Depr(3y)217.19%
Cap/Depr(5y)179.36%
Cap/Sales(3y)4.34%
Cap/Sales(5y)3.69%
Profit Quality(3y)65.27%
Profit Quality(5y)70.45%
High Growth Momentum
Growth
EPS 1Y (TTM)27.71%
EPS 3Y10.18%
EPS 5Y4.35%
EPS Q2Q%10%
EPS Next Y-14.36%
EPS Next 2Y-5.31%
EPS Next 3Y-0.53%
EPS Next 5YN/A
Revenue 1Y (TTM)-4.52%
Revenue growth 3Y6.48%
Revenue growth 5Y4.68%
Sales Q2Q%-1.08%
Revenue Next Year-2.91%
Revenue Next 2Y-0.07%
Revenue Next 3Y1.81%
Revenue Next 5YN/A
EBIT growth 1Y-9.66%
EBIT growth 3Y3.56%
EBIT growth 5Y0.07%
EBIT Next Year-2.33%
EBIT Next 3Y3.35%
EBIT Next 5YN/A
FCF growth 1Y-39.9%
FCF growth 3Y-17.71%
FCF growth 5Y-9.2%
OCF growth 1Y-25.95%
OCF growth 3Y-7.48%
OCF growth 5Y-4.16%