We assign a fundamental rating of 5 out of 10 to BFH. BFH was compared to 53 industry peers in the Consumer Finance industry. BFH has an average financial health and profitability rating. A decent growth rate in combination with a cheap valuation! Better keep an eye on BFH.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

BFH had positive earnings in the past year.
BFH had a positive operating cash flow in the past year.
In the past 5 years BFH has always been profitable.
In the past 5 years BFH always reported a positive cash flow from operatings.

1.2 Ratios

BFH's Return On Assets of 2.17% is in line compared to the rest of the industry. BFH outperforms 52.83% of its industry peers.
BFH's Return On Equity of 14.23% is in line compared to the rest of the industry. BFH outperforms 56.60% of its industry peers.
BFH has a Return On Invested Capital (4.94%) which is comparable to the rest of the industry.
The Average Return On Invested Capital over the past 3 years for BFH is significantly below the industry average of 12.42%.
The last Return On Invested Capital (4.94%) for BFH is above the 3 year average (4.40%), which is a sign of increasing profitability.

		Industry Rank	Sector Rank
ROA	2.17%
ROE	14.23%
ROIC	4.94%

ROA(3y)1.73%

ROA(5y)1.96%

ROE(3y)14.51%

ROE(5y)19.2%

ROIC(3y)4.4%

ROIC(5y)4.64%

1.3 Margins

BFH's Profit Margin of 10.52% is in line compared to the rest of the industry. BFH outperforms 45.28% of its industry peers.
In the last couple of years the Profit Margin of BFH has remained more or less at the same level.
Looking at the Operating Margin, with a value of 32.03%, BFH belongs to the top of the industry, outperforming 84.91% of the companies in the same industry.
BFH's Operating Margin has been stable in the last couple of years.
With an excellent Gross Margin value of 92.67%, BFH belongs to the best of the industry, outperforming 88.68% of the companies in the same industry.
In the last couple of years the Gross Margin of BFH has remained more or less at the same level.

		Industry Rank	Sector Rank
OM	32.03%
PM (TTM)	10.52%
GM	92.67%

OM growth 3Y-9.81%

OM growth 5Y0.65%

PM growth 3Y-35.19%

PM growth 5Y0.78%

GM growth 3Y0.66%

GM growth 5Y0.7%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), BFH is creating some value.
The number of shares outstanding for BFH has been reduced compared to 1 year ago.
BFH has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, BFH has an improved debt to assets ratio.

2.2 Solvency

Based on the Altman-Z score of 0.94, we must say that BFH is in the distress zone and has some risk of bankruptcy.
BFH has a Altman-Z score of 0.94. This is in the better half of the industry: BFH outperforms 62.26% of its industry peers.
BFH has a debt to FCF ratio of 8.77. This is a slightly negative value and a sign of low solvency as BFH would need 8.77 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 8.77, BFH is doing good in the industry, outperforming 62.26% of the companies in the same industry.
A Debt/Equity ratio of 5.22 is on the high side and indicates that BFH has dependencies on debt financing.
BFH's Debt to Equity ratio of 5.22 is on the low side compared to the rest of the industry. BFH is outperformed by 67.92% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	5.22
Debt/FCF	8.77
Altman-Z	0.94

ROIC/WACC1.63

WACC3.04%

2.3 Liquidity

BFH has a Current Ratio of 1.43. This is a normal value and indicates that BFH is financially healthy and should not expect problems in meeting its short term obligations.
BFH's Current ratio of 1.43 is fine compared to the rest of the industry. BFH outperforms 60.38% of its industry peers.
BFH has a Quick Ratio of 1.43. This is a normal value and indicates that BFH is financially healthy and should not expect problems in meeting its short term obligations.
BFH's Quick ratio of 1.43 is fine compared to the rest of the industry. BFH outperforms 60.38% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	1.43
Quick Ratio	1.43

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

BFH shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 21.26%, which is quite impressive.
The earnings per share for BFH have been decreasing by -15.20% on average. This is quite bad
Looking at the last year, BFH shows a decrease in Revenue. The Revenue has decreased by -5.66% in the last year.
Measured over the past years, BFH shows a decrease in Revenue. The Revenue has been decreasing by -0.19% on average per year.

EPS 1Y (TTM)21.26%

EPS 3Y-25.81%

EPS 5Y-15.2%

EPS Q2Q%116.39%

Revenue 1Y (TTM)-5.66%

Revenue growth 3Y8.3%

Revenue growth 5Y-0.19%

Sales Q2Q%-1.22%

3.2 Future

Based on estimates for the next years, BFH will show a small growth in Earnings Per Share. The EPS will grow by 1.22% on average per year.
Based on estimates for the next years, BFH will show a small growth in Revenue. The Revenue will grow by 1.39% on average per year.

EPS Next Y36%

EPS Next 2Y14.03%

EPS Next 3Y15.32%

EPS Next 5Y1.22%

Revenue Next Year-1.58%

Revenue Next 2Y0.94%

Revenue Next 3Y2.03%

Revenue Next 5Y1.39%

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 accelerating: in the next years the growth will be better than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 7.01 indicates a rather cheap valuation of BFH.
Based on the Price/Earnings ratio, BFH is valued a bit cheaper than 66.04% of the companies in the same industry.
When comparing the Price/Earnings ratio of BFH to the average of the S&P500 Index (27.21), we can say BFH is valued rather cheaply.
A Price/Forward Earnings ratio of 7.22 indicates a rather cheap valuation of BFH.
BFH's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. BFH is cheaper than 73.58% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 25.98, BFH is valued rather cheaply.

		Industry Rank	Sector Rank
PE	7.01
Fwd PE	7.22

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, BFH is valued cheaply inside the industry as 84.91% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, BFH is valued cheaper than 86.79% of the companies in the same industry.

		Industry Rank	Sector Rank
P/FCF	1.59
EV/EBITDA	2.08

4.3 Compensation for Growth

The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The decent profitability rating of BFH may justify a higher PE ratio.
A more expensive valuation may be justified as BFH's earnings are expected to grow with 15.32% in the coming years.

PEG (NY)0.19

PEG (5Y)N/A

EPS Next 2Y14.03%

EPS Next 3Y15.32%

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5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 1.30%, BFH has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 2.63, BFH has a dividend in line with its industry peers.
BFH's Dividend Yield is slightly below the S&P500 average, which is at 1.81.

		Industry Rank	Sector Rank
Dividend Yield	1.3%

5.2 History

The dividend of BFH decreases each year by -19.10%.
BFH has been paying a dividend for at least 10 years, so it has a reliable track record.
BFH has not decreased its dividend in the last 3 years.

Dividend Growth(5Y)-19.1%

Div Incr Years0

Div Non Decr Years3

5.3 Sustainability

8.90% of the earnings are spent on dividend by BFH. This is a low number and sustainable payout ratio.

DP8.9%

EPS Next 2Y14.03%

EPS Next 3Y15.32%

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BREAD FINANCIAL HOLDINGS INC / BFH FAQ

Can you provide the ChartMill fundamental rating for BREAD FINANCIAL HOLDINGS INC?

ChartMill assigns a fundamental rating of 5 / 10 to BFH.

What is the valuation status of BREAD FINANCIAL HOLDINGS INC (BFH) stock?

ChartMill assigns a valuation rating of 9 / 10 to BREAD FINANCIAL HOLDINGS INC (BFH). This can be considered as Undervalued.

What is the profitability of BFH stock?

BREAD FINANCIAL HOLDINGS INC (BFH) has a profitability rating of 6 / 10.

What is the earnings growth outlook for BREAD FINANCIAL HOLDINGS INC?

The Earnings per Share (EPS) of BREAD FINANCIAL HOLDINGS INC (BFH) is expected to grow by 36% in the next year.

Can you provide the dividend sustainability for BFH stock?

The dividend rating of BREAD FINANCIAL HOLDINGS INC (BFH) is 4 / 10 and the dividend payout ratio is 8.9%.