BROWN-FORMAN CORP-CLASS B (BF.B) Stock Fundamental Analysis
NYSE:BF.B - New York Stock Exchange, Inc. - US1156372096 - Common Stock - Currency: USD
BF.B gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 33 industry peers in the Beverages industry. BF.B has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. BF.B has a valuation in line with the averages, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year BF.B was profitable.
BF.B had a positive operating cash flow in the past year.
In the past 5 years BF.B has always been profitable.
In the past 5 years BF.B always reported a positive cash flow from operatings.
1.2 Ratios
With an excellent Return On Assets value of 10.75%, BF.B belongs to the best of the industry, outperforming 90.91% of the companies in the same industry.
BF.B's Return On Equity of 21.76% is fine compared to the rest of the industry. BF.B outperforms 72.73% of its industry peers.
BF.B has a better Return On Invested Capital (13.32%) than 75.76% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for BF.B is above the industry average of 11.23%.
| 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
BF.B has a Profit Margin of 21.86%. This is amongst the best in the industry. BF.B outperforms 96.97% of its industry peers.
BF.B's Profit Margin has declined in the last couple of years.
BF.B has a better Operating Margin (30.79%) than 96.97% of its industry peers.
In the last couple of years the Operating Margin of BF.B has remained more or less at the same level.
With an excellent Gross Margin value of 58.94%, BF.B belongs to the best of the industry, outperforming 87.88% of the companies in the same industry.
BF.B'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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), BF.B is creating some value.
Compared to 1 year ago, BF.B has about the same amount of shares outstanding.
The number of shares outstanding for BF.B has been reduced compared to 5 years ago.
BF.B has a better debt/assets ratio than last year.
2.2 Solvency
BF.B has an Altman-Z score of 4.17. This indicates that BF.B is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of BF.B (4.17) is better than 72.73% of its industry peers.
BF.B has a debt to FCF ratio of 6.34. This is a slightly negative value and a sign of low solvency as BF.B would need 6.34 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 6.34, BF.B is in the better half of the industry, outperforming 63.64% of the companies in the same industry.
BF.B has a Debt/Equity ratio of 0.68. This is a neutral value indicating BF.B is somewhat dependend on debt financing.
BF.B's Debt to Equity ratio of 0.68 is in line compared to the rest of the industry. BF.B outperforms 51.52% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.68 | ||
| Debt/FCF | 6.34 | ||
| Altman-Z | 4.17 |
ROIC/WACC1.67
WACC8%
2.3 Liquidity
BF.B has a Current Ratio of 3.88. This indicates that BF.B is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of BF.B (3.88) is better than 100.00% of its industry peers.
BF.B has a Quick Ratio of 1.56. This is a normal value and indicates that BF.B is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 1.56, BF.B is in the better half of the industry, outperforming 78.79% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.88 | ||
| Quick Ratio | 1.56 |
3. Growth
3.1 Past
The earnings per share for BF.B have decreased strongly by -20.56% in the last year.
Measured over the past years, BF.B 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
Based on estimates for the next years, BF.B will show a small growth in Earnings Per Share. The EPS will grow by 4.14% on average per year.
The Revenue is expected to grow by 0.30% on average over the next years.
EPS Next Y-0.88%
EPS Next 2Y2.09%
EPS Next 3Y4.14%
EPS Next 5YN/A
Revenue Next Year-5.04%
Revenue Next 2Y-1.56%
Revenue Next 3Y0.3%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better 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
With a Price/Earnings ratio of 16.17, BF.B is valued correctly.
Based on the Price/Earnings ratio, BF.B is valued a bit cheaper than the industry average as 72.73% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of BF.B to the average of the S&P500 Index (27.19), we can say BF.B is valued slightly cheaper.
The Price/Forward Earnings ratio is 16.31, which indicates a correct valuation of BF.B.
Compared to the rest of the industry, the Price/Forward Earnings ratio of BF.B indicates a somewhat cheap valuation: BF.B is cheaper than 66.67% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 35.33, BF.B is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.17 | ||
| Fwd PE | 16.31 |
4.2 Price Multiples
66.67% of the companies in the same industry are more expensive than BF.B, based on the Enterprise Value to EBITDA ratio.
60.61% of the companies in the same industry are more expensive than BF.B, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.15 | ||
| EV/EBITDA | 11.42 |
4.3 Compensation for Growth
The decent profitability rating of BF.B may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y2.09%
EPS Next 3Y4.14%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.11%, BF.B has a reasonable but not impressive dividend return.
BF.B's Dividend Yield is a higher than the industry average which is at 3.08.
BF.B's Dividend Yield is a higher than the S&P500 average which is at 2.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.11% |
5.2 History
The dividend of BF.B has a limited annual growth rate of 5.49%.
BF.B has been paying a dividend for at least 10 years, so it has a reliable track record.
BF.B has decreased its dividend recently.
Dividend Growth(5Y)5.49%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
48.33% of the earnings are spent on dividend by BF.B. This is a bit on the high side, but may be sustainable.
BF.B's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP48.33%
EPS Next 2Y2.09%
EPS Next 3Y4.14%
27.49
-0.73 (-2.59%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryBeverages
Earnings (Last)
Earnings (Next)
Inst Owners65.9%
Inst Owner Change0.01%
Ins Owners0.38%
Ins Owner ChangeN/A
Market Cap13.00B
Analysts55.38
Price Target32.96 (19.9%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.11% |
Yearly Dividend0.89
Dividend Growth(5Y)5.49%
DP48.33%
Div Incr Years1
Div Non Decr Years1
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)-18.37%
PT rev (3m)-19.89%
EPS NQ rev (1m)-0.96%
EPS NQ rev (3m)-9.17%
EPS NY rev (1m)-11.41%
EPS NY rev (3m)-11.1%
Revenue NQ rev (1m)-0.58%
Revenue NQ rev (3m)-4.96%
Revenue NY rev (1m)-6.64%
Revenue NY rev (3m)-7%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.17 | ||
| Fwd PE | 16.31 | ||
| P/S | 3.27 | ||
| P/FCF | 30.15 | ||
| P/OCF | 21.73 | ||
| P/B | 3.25 | ||
| P/tB | 8.62 | ||
| EV/EBITDA | 11.42 |
EPS(TTM)1.7
EY6.18%
EPS(NY)1.68
Fwd EY6.13%
FCF(TTM)0.91
FCFY3.32%
OCF(TTM)1.26
OCFY4.6%
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
WACC8%
ROIC/WACC1.67
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-0.88%
EPS Next 2Y2.09%
EPS Next 3Y4.14%
EPS Next 5YN/A
Revenue 1Y (TTM)-4.86%
Revenue growth 3Y0.35%
Revenue growth 5Y3.4%
Sales Q2Q%-7.26%
Revenue Next Year-5.04%
Revenue Next 2Y-1.56%
Revenue Next 3Y0.3%
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%