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 5 out of 10. The analysis compared the fundamentals against 32 industry peers in the Beverages industry. BF.B scores excellent on profitability, but there are some minor concerns on its financial health. BF.B has a valuation in line with the averages, but on the other hand it scores bad on growth.
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.
BF.B had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
BF.B has a Return On Assets of 12.05%. This is amongst the best in the industry. BF.B outperforms 89.66% of its industry peers.
BF.B's Return On Equity of 27.10% is fine compared to the rest of the industry. BF.B outperforms 79.31% of its industry peers.
Looking at the Return On Invested Capital, with a value of 11.99%, BF.B is in the better half of the industry, outperforming 62.07% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for BF.B is in line with the industry average of 13.22%.
| 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.B has a Profit Margin of 24.61%. This is amongst the best in the industry. BF.B outperforms 100.00% of its industry peers.
BF.B's Profit Margin has been stable in the last couple of years.
The Operating Margin of BF.B (27.51%) is better than 89.66% of its industry peers.
In the last couple of years the Operating Margin of BF.B has declined.
Looking at the Gross Margin, with a value of 59.21%, BF.B belongs to the top of the industry, outperforming 82.76% of the companies in the same industry.
In the last couple of years the Gross Margin of BF.B has remained more or less at the same level.
| 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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so BF.B is creating value.
Compared to 1 year ago, BF.B has less shares outstanding
The number of shares outstanding for BF.B has been reduced compared to 5 years ago.
The debt/assets ratio for BF.B is higher compared to a year ago.
2.2 Solvency
BF.B has an Altman-Z score of 4.10. This indicates that BF.B is financially healthy and has little risk of bankruptcy at the moment.
BF.B has a better Altman-Z score (4.10) than 72.41% of its industry peers.
BF.B has a debt to FCF ratio of 6.99. This is a slightly negative value and a sign of low solvency as BF.B would need 6.99 years to pay back of all of its debts.
BF.B has a Debt to FCF ratio (6.99) which is in line with its industry peers.
BF.B has a Debt/Equity ratio of 0.78. This is a neutral value indicating BF.B is somewhat dependend on debt financing.
BF.B has a Debt to Equity ratio of 0.78. This is comparable to the rest of the industry: BF.B outperforms 51.72% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.78 | ||
| Debt/FCF | 6.99 | ||
| Altman-Z | 4.1 |
ROIC/WACC1.5
WACC8.01%
2.3 Liquidity
BF.B has a Current Ratio of 2.70. This indicates that BF.B is financially healthy and has no problem in meeting its short term obligations.
BF.B has a better Current ratio (2.70) than 79.31% of its industry peers.
BF.B has a Quick Ratio of 1.05. This is a normal value and indicates that BF.B is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of BF.B (1.05) is better than 62.07% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.7 | ||
| Quick Ratio | 1.05 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 27.71% over the past year.
BF.B shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 4.35% yearly.
The Revenue has decreased by -4.52% in the past year.
Measured over the past years, BF.B shows a small growth in Revenue. The Revenue has been growing by 4.68% on average per year.
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.B is expected to show a decrease in Earnings Per Share. In the coming years, the EPS will decrease by -0.53% yearly.
Based on estimates for the next years, BF.B will show a small growth in Revenue. The Revenue will grow by 1.81% on average per year.
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.B is valuated correctly with a Price/Earnings ratio of 15.58.
BF.B's Price/Earnings ratio is a bit cheaper when compared to the industry. BF.B is cheaper than 79.31% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 29.75, BF.B is valued a bit cheaper.
The Price/Forward Earnings ratio is 17.22, which indicates a rather expensive current valuation of BF.B.
BF.B's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. BF.B is cheaper than 65.52% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.44, BF.B is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.58 | ||
| Fwd PE | 17.22 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of BF.B is on the same level as its industry peers.
BF.B's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 34.1 | ||
| EV/EBITDA | 14.76 |
4.3 Compensation for Growth
The decent profitability rating of BF.B may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)3.59
EPS Next 2Y-5.31%
EPS Next 3Y-0.53%
5. Dividend
5.1 Amount
BF.B has a Yearly Dividend Yield of 2.74%. Purely for dividend investing, there may be better candidates out there.
In the last 3 months the price of BF.B has falen by -25.60%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
Compared to an average industry Dividend Yield of 3.17, BF.B pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.30, BF.B has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.74% |
5.2 History
The dividend of BF.B has a limited annual growth rate of 5.58%.
BF.B has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)5.58%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
41.14% of the earnings are spent on dividend by BF.B. This is a bit on the high side, but may be sustainable.
DP41.14%
EPS Next 2Y-5.31%
EPS Next 3Y-0.53%
33.04
-0.07 (-0.21%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryBeverages
Earnings (Last)
Earnings (Next)
Inst Owners61.05%
Inst Owner Change-2.54%
Ins Owners0.39%
Ins Owner ChangeN/A
Market Cap15.62B
Analysts55.83
Price Target46.57 (40.95%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.74% |
Yearly Dividend0.85
Dividend Growth(5Y)5.58%
DP41.14%
Div Incr Years0
Div Non Decr Years0
Ex-Date
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)0%
PT rev (3m)-3.79%
EPS NQ rev (1m)-0.14%
EPS NQ rev (3m)-4.35%
EPS NY rev (1m)0%
EPS NY rev (3m)0.49%
Revenue NQ rev (1m)-0.36%
Revenue NQ rev (3m)-1.88%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.17%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.58 | ||
| Fwd PE | 17.22 | ||
| P/S | 3.83 | ||
| P/FCF | 34.1 | ||
| P/OCF | 23 | ||
| P/B | 4.22 | ||
| P/tB | 12.62 | ||
| EV/EBITDA | 14.76 |
EPS(TTM)2.12
EY6.42%
EPS(NY)1.92
Fwd EY5.81%
FCF(TTM)0.97
FCFY2.93%
OCF(TTM)1.44
OCFY4.35%
SpS8.63
BVpS7.84
TBVpS2.62
PEG (NY)N/A
PEG (5Y)3.59
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 | 4.1 |
F-Score5
WACC8.01%
ROIC/WACC1.5
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%