BRF SA-ADR (BRFS) Stock Fundamental Analysis
NYSE:BRFS - New York Stock Exchange, Inc. - US10552T1079 - ADR - Currency: USD
We assign a fundamental rating of 5 out of 10 to BRFS. BRFS was compared to 91 industry peers in the Food Products industry. While BRFS is still in line with the averages on profitability rating, there are concerns on its financial health. BRFS may be a bit undervalued, certainly considering the very reasonable score on growth
1. Profitability
1.1 Basic Checks
In the past year BRFS was profitable.
In the past year BRFS had a positive cash flow from operations.
In multiple years BRFS reported negative net income over the last 5 years.
Each year in the past 5 years BRFS had a positive operating cash flow.
1.2 Ratios
The Return On Assets of BRFS (5.40%) is better than 68.13% of its industry peers.
With an excellent Return On Equity value of 19.77%, BRFS belongs to the best of the industry, outperforming 89.01% of the companies in the same industry.
BRFS's Return On Invested Capital of 11.52% is amongst the best of the industry. BRFS outperforms 84.62% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.4% | ||
| ROE | 19.77% | ||
| ROIC | 11.52% |
ROA(3y)-2.75%
ROA(5y)-0.95%
ROE(3y)-12.24%
ROE(5y)-3.37%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
BRFS has a better Profit Margin (5.61%) than 74.73% of its industry peers.
Looking at the Operating Margin, with a value of 10.24%, BRFS is in the better half of the industry, outperforming 73.63% of the companies in the same industry.
In the last couple of years the Operating Margin of BRFS has declined.
BRFS has a Gross Margin of 24.99%. This is in the better half of the industry: BRFS outperforms 61.54% of its industry peers.
In the last couple of years the Gross Margin of BRFS has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 10.24% | ||
| PM (TTM) | 5.61% | ||
| GM | 24.99% |
OM growth 3Y-41.4%
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-11.78%
GM growth 5Y0.43%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so BRFS is destroying value.
The number of shares outstanding for BRFS has been increased compared to 1 year ago.
The number of shares outstanding for BRFS has been increased compared to 5 years ago.
Compared to 1 year ago, BRFS has an improved debt to assets ratio.
2.2 Solvency
BRFS has an Altman-Z score of 2.01. This is not the best score and indicates that BRFS is in the grey zone with still only limited risk for bankruptcy at the moment.
The Altman-Z score of BRFS (2.01) is comparable to the rest of the industry.
The Debt to FCF ratio of BRFS is 3.15, which is a good value as it means it would take BRFS, 3.15 years of fcf income to pay off all of its debts.
BRFS's Debt to FCF ratio of 3.15 is fine compared to the rest of the industry. BRFS outperforms 74.73% of its industry peers.
A Debt/Equity ratio of 1.30 is on the high side and indicates that BRFS has dependencies on debt financing.
With a Debt to Equity ratio value of 1.30, BRFS is not doing good in the industry: 75.82% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.3 | ||
| Debt/FCF | 3.15 | ||
| Altman-Z | 2.01 |
ROIC/WACC0.93
WACC12.39%
2.3 Liquidity
A Current Ratio of 1.45 indicates that BRFS should not have too much problems paying its short term obligations.
BRFS has a Current ratio (1.45) which is in line with its industry peers.
BRFS has a Quick Ratio of 1.45. This is a bad value and indicates that BRFS is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of BRFS (0.93) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.45 | ||
| Quick Ratio | 0.93 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 167.75% over the past year.
BRFS shows a small growth in Revenue. In the last year, the Revenue has grown by 7.97%.
BRFS shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 12.17% yearly.
EPS 1Y (TTM)167.75%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%358.33%
Revenue 1Y (TTM)7.97%
Revenue growth 3Y10.75%
Revenue growth 5Y12.17%
Sales Q2Q%12.43%
3.2 Future
BRFS is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 32.47% yearly.
Based on estimates for the next years, BRFS will show a small growth in Revenue. The Revenue will grow by 6.01% on average per year.
EPS Next Y250.55%
EPS Next 2Y81.27%
EPS Next 3Y46.45%
EPS Next 5Y32.47%
Revenue Next Year12.31%
Revenue Next 2Y9.97%
Revenue Next 3Y8.21%
Revenue Next 5Y6.01%
3.3 Evolution
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
A Price/Earnings ratio of 8.30 indicates a reasonable valuation of BRFS.
Compared to the rest of the industry, the Price/Earnings ratio of BRFS indicates a rather cheap valuation: BRFS is cheaper than 93.41% of the companies listed in the same industry.
BRFS is valuated cheaply when we compare the Price/Earnings ratio to 29.35, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 8.37, the valuation of BRFS can be described as reasonable.
Based on the Price/Forward Earnings ratio, BRFS is valued cheaply inside the industry as 98.90% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.10, BRFS is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.3 | ||
| Fwd PE | 8.37 |
4.2 Price Multiples
BRFS's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. BRFS is cheaper than 89.01% of the companies in the same industry.
92.31% of the companies in the same industry are more expensive than BRFS, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 4.14 | ||
| EV/EBITDA | 4.63 |
4.3 Compensation for Growth
BRFS's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
BRFS has a very decent profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as BRFS's earnings are expected to grow with 46.45% in the coming years.
PEG (NY)0.03
PEG (5Y)N/A
EPS Next 2Y81.27%
EPS Next 3Y46.45%
5. Dividend
5.1 Amount
BRFS has a Yearly Dividend Yield of 3.78%. Purely for dividend investing, there may be better candidates out there.
In the last 3 months the price of BRFS has falen by -28.76%. 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 3.89, BRFS pays a better dividend. On top of this BRFS pays more dividend than 82.42% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.33, BRFS pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.78% |
5.2 History
On average, the dividend of BRFS grows each year by 20.47%, which is quite nice.
BRFS has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)20.47%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
The dividend of BRFS is growing, but earnings are growing more, so the dividend growth is sustainable.
DP0%
EPS Next 2Y81.27%
EPS Next 3Y46.45%
3.32
+0.1 (+3.11%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryFood Products
Earnings (Last)
Earnings (Next)
Inst Owners30.39%
Inst Owner Change15.95%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap5.36B
Analysts75.56
Price Target4.89 (47.29%)
Short Float %0.32%
Short Ratio1.14
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.78% |
Yearly Dividend0.26
Dividend Growth(5Y)20.47%
DP0%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)15.18%
Min EPS beat(2)-9.48%
Max EPS beat(2)39.84%
EPS beat(4)3
Avg EPS beat(4)68.95%
Min EPS beat(4)-9.48%
Max EPS beat(4)172.59%
EPS beat(8)4
Avg EPS beat(8)-94.25%
EPS beat(12)5
Avg EPS beat(12)-303.17%
EPS beat(16)6
Avg EPS beat(16)-254.3%
Revenue beat(2)1
Avg Revenue beat(2)-0.66%
Min Revenue beat(2)-3.19%
Max Revenue beat(2)1.87%
Revenue beat(4)1
Avg Revenue beat(4)-2.63%
Min Revenue beat(4)-4.89%
Max Revenue beat(4)1.87%
Revenue beat(8)2
Avg Revenue beat(8)-2.15%
Revenue beat(12)2
Avg Revenue beat(12)-2.08%
Revenue beat(16)5
Avg Revenue beat(16)-1.22%
PT rev (1m)-3.6%
PT rev (3m)10.63%
EPS NQ rev (1m)0.41%
EPS NQ rev (3m)-10.42%
EPS NY rev (1m)1.92%
EPS NY rev (3m)16.9%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.41%
Revenue NY rev (1m)0.24%
Revenue NY rev (3m)2.75%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.3 | ||
| Fwd PE | 8.37 | ||
| P/S | 0.53 | ||
| P/FCF | 4.14 | ||
| P/OCF | 3.2 | ||
| P/B | 1.87 | ||
| P/tB | 3.05 | ||
| EV/EBITDA | 4.63 |
EPS(TTM)0.4
EY12.05%
EPS(NY)0.4
Fwd EY11.94%
FCF(TTM)0.8
FCFY24.15%
OCF(TTM)1.04
OCFY31.28%
SpS6.26
BVpS1.78
TBVpS1.09
PEG (NY)0.03
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.4% | ||
| ROE | 19.77% | ||
| ROCE | 14.58% | ||
| ROIC | 11.52% | ||
| ROICexc | 15.66% | ||
| ROICexgc | 19.89% | ||
| OM | 10.24% | ||
| PM (TTM) | 5.61% | ||
| GM | 24.99% | ||
| FCFM | 12.81% |
ROA(3y)-2.75%
ROA(5y)-0.95%
ROE(3y)-12.24%
ROE(5y)-3.37%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3Y-36.01%
ROICexcg growth 5YN/A
ROICexc growth 3Y-36.54%
ROICexc growth 5YN/A
OM growth 3Y-41.4%
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-11.78%
GM growth 5Y0.43%
F-Score8
Asset Turnover0.96
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.3 | ||
| Debt/FCF | 3.15 | ||
| Debt/EBITDA | 2.29 | ||
| Cap/Depr | 64.05% | ||
| Cap/Sales | 3.78% | ||
| Interest Coverage | 2.84 | ||
| Cash Conversion | 102.78% | ||
| Profit Quality | 228.35% | ||
| Current Ratio | 1.45 | ||
| Quick Ratio | 0.93 | ||
| Altman-Z | 2.01 |
F-Score8
WACC12.39%
ROIC/WACC0.93
Cap/Depr(3y)95.28%
Cap/Depr(5y)84.56%
Cap/Sales(3y)5.45%
Cap/Sales(5y)5.03%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)167.75%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%358.33%
EPS Next Y250.55%
EPS Next 2Y81.27%
EPS Next 3Y46.45%
EPS Next 5Y32.47%
Revenue 1Y (TTM)7.97%
Revenue growth 3Y10.75%
Revenue growth 5Y12.17%
Sales Q2Q%12.43%
Revenue Next Year12.31%
Revenue Next 2Y9.97%
Revenue Next 3Y8.21%
Revenue Next 5Y6.01%
EBIT growth 1Y1222.96%
EBIT growth 3Y-35.1%
EBIT growth 5YN/A
EBIT Next Year1042.35%
EBIT Next 3Y113.69%
EBIT Next 5Y81.09%
FCF growth 1Y558.32%
FCF growth 3Y-27.11%
FCF growth 5YN/A
OCF growth 1Y509.79%
OCF growth 3Y-12.29%
OCF growth 5Y67.85%