BROWN-FORMAN CORP-CLASS A (BF.A) Stock Fundamental Analysis
NYSE:BF.A - New York Stock Exchange, Inc. - US1156371007 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to BF.A. BF.A was compared to 32 industry peers in the Beverages industry. BF.A has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. BF.A is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
BF.A had positive earnings in the past year.
BF.A had a positive operating cash flow in the past year.
BF.A had positive earnings in each of the past 5 years.
BF.A had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 10.75%, BF.A belongs to the best of the industry, outperforming 87.50% of the companies in the same industry.
Looking at the Return On Equity, with a value of 21.76%, BF.A is in the better half of the industry, outperforming 68.75% of the companies in the same industry.
BF.A's Return On Invested Capital of 13.32% is fine compared to the rest of the industry. BF.A outperforms 71.88% of its industry peers.
The Average Return On Invested Capital over the past 3 years for BF.A is in line with the industry average of 11.61%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.75% | ||
| ROE | 21.76% | ||
| ROIC | 13.32% |
ROA(3y)11.12%
ROA(5y)12.07%
ROE(3y)24.95%
ROE(5y)27.89%
ROIC(3y)13.49%
ROIC(5y)14.53%
1.3 Margins
With an excellent Profit Margin value of 21.86%, BF.A belongs to the best of the industry, outperforming 93.75% of the companies in the same industry.
In the last couple of years the Profit Margin of BF.A has declined.
Looking at the Operating Margin, with a value of 30.79%, BF.A belongs to the top of the industry, outperforming 93.75% of the companies in the same industry.
BF.A's Operating Margin has been stable in the last couple of years.
The Gross Margin of BF.A (58.94%) is better than 84.38% of its industry peers.
BF.A's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 30.79% | ||
| PM (TTM) | 21.86% | ||
| GM | 58.94% |
OM growth 3Y0.25%
OM growth 5Y-1.49%
PM growth 3Y0.86%
PM growth 5Y-2.33%
GM growth 3Y-1.02%
GM growth 5Y-1.4%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so BF.A is still creating some value.
Compared to 1 year ago, BF.A has about the same amount of shares outstanding.
Compared to 5 years ago, BF.A has less shares outstanding
BF.A has a better debt/assets ratio than last year.
2.2 Solvency
BF.A has an Altman-Z score of 4.17. This indicates that BF.A is financially healthy and has little risk of bankruptcy at the moment.
BF.A's Altman-Z score of 4.17 is fine compared to the rest of the industry. BF.A outperforms 75.00% of its industry peers.
The Debt to FCF ratio of BF.A is 6.34, which is on the high side as it means it would take BF.A, 6.34 years of fcf income to pay off all of its debts.
BF.A has a better Debt to FCF ratio (6.34) than 62.50% of its industry peers.
BF.A has a Debt/Equity ratio of 0.68. This is a neutral value indicating BF.A is somewhat dependend on debt financing.
BF.A has a Debt to Equity ratio (0.68) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.68 | ||
| Debt/FCF | 6.34 | ||
| Altman-Z | 4.17 |
ROIC/WACC1.37
WACC9.7%
2.3 Liquidity
BF.A has a Current Ratio of 3.88. This indicates that BF.A is financially healthy and has no problem in meeting its short term obligations.
BF.A has a Current ratio of 3.88. This is amongst the best in the industry. BF.A outperforms 96.88% of its industry peers.
A Quick Ratio of 1.56 indicates that BF.A should not have too much problems paying its short term obligations.
The Quick ratio of BF.A (1.56) is better than 75.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.88 | ||
| Quick Ratio | 1.56 |
3. Growth
3.1 Past
The earnings per share for BF.A have decreased strongly by -20.56% in the last year.
Measured over the past years, BF.A shows a decrease in Earnings Per Share. The EPS has been decreasing by -0.35% on average per year.
The Revenue has decreased by -4.86% in the past year.
The Revenue has been growing slightly by 3.40% on average over the past years.
EPS 1Y (TTM)-20.56%
EPS 3Y-0.77%
EPS 5Y-0.35%
EPS Q2Q%-44.64%
Revenue 1Y (TTM)-4.86%
Revenue growth 3Y0.35%
Revenue growth 5Y3.4%
Sales Q2Q%-7.26%
3.2 Future
BF.A is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 3.96% yearly.
BF.A is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 0.31% yearly.
EPS Next Y-1.02%
EPS Next 2Y1.98%
EPS Next 3Y3.96%
EPS Next 5YN/A
Revenue Next Year-5.09%
Revenue Next 2Y-1.6%
Revenue Next 3Y0.31%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 16.63, which indicates a correct valuation of BF.A.
Based on the Price/Earnings ratio, BF.A is valued a bit cheaper than the industry average as 71.88% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 27.21, BF.A is valued a bit cheaper.
BF.A is valuated correctly with a Price/Forward Earnings ratio of 16.80.
BF.A's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. BF.A is cheaper than 65.63% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of BF.A to the average of the S&P500 Index (21.70), we can say BF.A is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.63 | ||
| Fwd PE | 16.8 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of BF.A indicates a somewhat cheap valuation: BF.A is cheaper than 68.75% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of BF.A is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31 | ||
| EV/EBITDA | 11.41 |
4.3 Compensation for Growth
The decent profitability rating of BF.A may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y1.98%
EPS Next 3Y3.96%
5. Dividend
5.1 Amount
BF.A has a Yearly Dividend Yield of 3.46%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.14, BF.A pays a better dividend. On top of this BF.A pays more dividend than 81.25% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.42, BF.A pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.46% |
5.2 History
The dividend of BF.A has a limited annual growth rate of 5.49%.
BF.A has paid a dividend for at least 10 years, which is a reliable track record.
BF.A has decreased its dividend in the last 3 years.
Dividend Growth(5Y)5.49%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
48.33% of the earnings are spent on dividend by BF.A. This is a bit on the high side, but may be sustainable.
BF.A's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP48.33%
EPS Next 2Y1.98%
EPS Next 3Y3.96%
28.27
+0.8 (+2.91%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryBeverages
Earnings (Last)
Earnings (Next)
Inst Owners65.9%
Inst Owner Change9.09%
Ins Owners0.38%
Ins Owner ChangeN/A
Market Cap13.36B
Analysts56
Price Target33.93 (20.02%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.46% |
Yearly Dividend0.89
Dividend Growth(5Y)5.49%
DP48.33%
Div Incr Years2
Div Non Decr Years2
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-9.89%
Min EPS beat(2)-11.43%
Max EPS beat(2)-8.35%
EPS beat(4)1
Avg EPS beat(4)-5.63%
Min EPS beat(4)-12.45%
Max EPS beat(4)9.71%
EPS beat(8)3
Avg EPS beat(8)-0.31%
EPS beat(12)4
Avg EPS beat(12)-4.99%
EPS beat(16)6
Avg EPS beat(16)-2.75%
Revenue beat(2)0
Avg Revenue beat(2)-7.44%
Min Revenue beat(2)-9.4%
Max Revenue beat(2)-5.48%
Revenue beat(4)0
Avg Revenue beat(4)-5.39%
Min Revenue beat(4)-9.4%
Max Revenue beat(4)-0.18%
Revenue beat(8)0
Avg Revenue beat(8)-5.65%
Revenue beat(12)3
Avg Revenue beat(12)-3.11%
Revenue beat(16)6
Avg Revenue beat(16)-1.01%
PT rev (1m)-15.91%
PT rev (3m)-16.44%
EPS NQ rev (1m)-8.29%
EPS NQ rev (3m)-8.29%
EPS NY rev (1m)-11.53%
EPS NY rev (3m)-11.22%
Revenue NQ rev (1m)-4.41%
Revenue NQ rev (3m)-4.41%
Revenue NY rev (1m)-7.02%
Revenue NY rev (3m)-9.03%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.63 | ||
| Fwd PE | 16.8 | ||
| P/S | 3.36 | ||
| P/FCF | 31 | ||
| P/OCF | 22.35 | ||
| P/B | 3.35 | ||
| P/tB | 8.87 | ||
| EV/EBITDA | 11.41 |
EPS(TTM)1.7
EY6.01%
EPS(NY)1.68
Fwd EY5.95%
FCF(TTM)0.91
FCFY3.23%
OCF(TTM)1.27
OCFY4.48%
SpS8.41
BVpS8.45
TBVpS3.19
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.75% | ||
| ROE | 21.76% | ||
| ROCE | 17.47% | ||
| ROIC | 13.32% | ||
| ROICexc | 14.18% | ||
| ROICexgc | 22.21% | ||
| OM | 30.79% | ||
| PM (TTM) | 21.86% | ||
| GM | 58.94% | ||
| FCFM | 10.84% |
ROA(3y)11.12%
ROA(5y)12.07%
ROE(3y)24.95%
ROE(5y)27.89%
ROIC(3y)13.49%
ROIC(5y)14.53%
ROICexc(3y)14.34%
ROICexc(5y)16.44%
ROICexgc(3y)23.06%
ROICexgc(5y)25.14%
ROCE(3y)17.75%
ROCE(5y)18.87%
ROICexcg growth 3Y-10.17%
ROICexcg growth 5Y-4.65%
ROICexc growth 3Y-12.83%
ROICexc growth 5Y-6.23%
OM growth 3Y0.25%
OM growth 5Y-1.49%
PM growth 3Y0.86%
PM growth 5Y-2.33%
GM growth 3Y-1.02%
GM growth 5Y-1.4%
F-Score3
Asset Turnover0.49
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.68 | ||
| Debt/FCF | 6.34 | ||
| Debt/EBITDA | 2.08 | ||
| Cap/Depr | 191.95% | ||
| Cap/Sales | 4.2% | ||
| Interest Coverage | 10.29 | ||
| Cash Conversion | 45.61% | ||
| Profit Quality | 49.6% | ||
| Current Ratio | 3.88 | ||
| Quick Ratio | 1.56 | ||
| Altman-Z | 4.17 |
F-Score3
WACC9.7%
ROIC/WACC1.37
Cap/Depr(3y)227.59%
Cap/Depr(5y)185.59%
Cap/Sales(3y)4.66%
Cap/Sales(5y)3.82%
Profit Quality(3y)49.63%
Profit Quality(5y)65.74%
High Growth Momentum
Growth
EPS 1Y (TTM)-20.56%
EPS 3Y-0.77%
EPS 5Y-0.35%
EPS Q2Q%-44.64%
EPS Next Y-1.02%
EPS Next 2Y1.98%
EPS Next 3Y3.96%
EPS Next 5YN/A
Revenue 1Y (TTM)-4.86%
Revenue growth 3Y0.35%
Revenue growth 5Y3.4%
Sales Q2Q%-7.26%
Revenue Next Year-5.09%
Revenue Next 2Y-1.6%
Revenue Next 3Y0.31%
Revenue Next 5YN/A
EBIT growth 1Y6.07%
EBIT growth 3Y0.61%
EBIT growth 5Y1.86%
EBIT Next Year15.38%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y2.86%
FCF growth 3Y-18.93%
FCF growth 5Y-6.56%
OCF growth 1Y-7.57%
OCF growth 3Y-13.87%
OCF growth 5Y-3.75%