BRF SA (BRFS) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:BRFS - US10552T1079 - ADR
3.38 USD
-0.44 (-11.52%)
3.49 USD
+0.11 (+3.25%)
We assign a fundamental rating of 6 out of 10 to BRFS. BRFS was compared to 87 industry peers in the Food Products industry. While BRFS belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. BRFS is valued quite cheap, while showing a decent growth score. This is a good combination! Finally BRFS also has an excellent dividend rating. This makes BRFS very considerable for value and dividend investing!
1. Profitability
1.1 Basic Checks
- BRFS had positive earnings in the past year.
- In the past year BRFS had a positive cash flow from operations.
- The reported net income has been mixed in the past 5 years: BRFS reported negative net income in multiple years.
- BRFS had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- BRFS's Return On Assets of 5.58% is fine compared to the rest of the industry. BRFS outperforms 76.40% of its industry peers.
- Looking at the Return On Equity, with a value of 21.28%, BRFS belongs to the top of the industry, outperforming 92.13% of the companies in the same industry.
- BRFS has a better Return On Invested Capital (12.38%) than 88.76% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.58% | ||
| ROE | 21.28% | ||
| ROIC | 12.38% |
ROA(3y)-1.3%
ROA(5y)-0.07%
ROE(3y)-6.8%
ROE(5y)0.14%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
- BRFS has a Profit Margin of 5.61%. This is in the better half of the industry: BRFS outperforms 74.16% of its industry peers.
- In the last couple of years the Profit Margin of BRFS has grown nicely.
- BRFS has a Operating Margin of 11.29%. This is in the better half of the industry: BRFS outperforms 76.40% of its industry peers.
- In the last couple of years the Operating Margin of BRFS has grown nicely.
- With a decent Gross Margin value of 26.31%, BRFS is doing good in the industry, outperforming 62.92% of the companies in the same industry.
- 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 | 11.29% | ||
| PM (TTM) | 5.61% | ||
| GM | 26.31% |
OM growth 3Y21.97%
OM growth 5Y3.91%
PM growth 3Y82.05%
PM growth 5Y42.54%
GM growth 3Y8.77%
GM growth 5Y1.33%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), BRFS is creating some value.
- Compared to 1 year ago, BRFS has less shares outstanding
- Compared to 5 years ago, BRFS has more shares outstanding
- BRFS has a better debt/assets ratio than last year.
2.2 Solvency
- An Altman-Z score of 2.09 indicates that BRFS is not a great score, but indicates only limited risk for bankruptcy at the moment.
- BRFS has a Altman-Z score (2.09) which is in line with its industry peers.
- The Debt to FCF ratio of BRFS is 2.59, which is a good value as it means it would take BRFS, 2.59 years of fcf income to pay off all of its debts.
- BRFS has a Debt to FCF ratio of 2.59. This is amongst the best in the industry. BRFS outperforms 82.02% of its industry peers.
- BRFS has a Debt/Equity ratio of 1.30. This is a high value indicating a heavy dependency on external financing.
- BRFS has a worse Debt to Equity ratio (1.30) than 77.53% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.3 | ||
| Debt/FCF | 2.59 | ||
| Altman-Z | 2.09 |
ROIC/WACC1.34
WACC9.21%
2.3 Liquidity
- BRFS has a Current Ratio of 1.52. This is a normal value and indicates that BRFS is financially healthy and should not expect problems in meeting its short term obligations.
- With a Current ratio value of 1.52, BRFS perfoms like the industry average, outperforming 51.69% of the companies in the same industry.
- BRFS has a Quick Ratio of 1.05. This is a normal value and indicates that BRFS is financially healthy and should not expect problems in meeting its short term obligations.
- BRFS has a Quick ratio of 1.05. This is in the better half of the industry: BRFS outperforms 64.04% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.52 | ||
| Quick Ratio | 1.05 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an impressive 59.91% over the past year.
- Measured over the past years, BRFS shows a very strong growth in Earnings Per Share. The EPS has been growing by 37.09% on average per year.
- BRFS shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 13.10%.
- Measured over the past years, BRFS shows a quite strong growth in Revenue. The Revenue has been growing by 12.91% on average per year.
EPS 1Y (TTM)59.91%
EPS 3Y46.31%
EPS 5Y37.09%
EPS Q2Q%-22.3%
Revenue 1Y (TTM)13.1%
Revenue growth 3Y8.28%
Revenue growth 5Y12.91%
Sales Q2Q%2.91%
3.2 Future
- BRFS is expected to show a decrease in Earnings Per Share. In the coming years, the EPS will decrease by -5.99% yearly.
- BRFS is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.38% yearly.
EPS Next Y17.53%
EPS Next 2Y-3.05%
EPS Next 3Y-5.99%
EPS Next 5YN/A
Revenue Next Year6.34%
Revenue Next 2Y5.94%
Revenue Next 3Y5.38%
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
- With a Price/Earnings ratio of 8.05, the valuation of BRFS can be described as very reasonable.
- BRFS's Price/Earnings ratio is rather cheap when compared to the industry. BRFS is cheaper than 89.89% of the companies in the same industry.
- The average S&P500 Price/Earnings ratio is at 27.21. BRFS is valued rather cheaply when compared to this.
- With a Price/Forward Earnings ratio of 9.82, the valuation of BRFS can be described as very reasonable.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of BRFS indicates a rather cheap valuation: BRFS is cheaper than 91.01% of the companies listed in the same industry.
- BRFS is valuated cheaply when we compare the Price/Forward Earnings ratio to 24.26, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.05 | ||
| Fwd PE | 9.82 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, BRFS is valued cheaply inside the industry as 95.51% of the companies are valued more expensively.
- Based on the Price/Free Cash Flow ratio, BRFS is valued cheaper than 94.38% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 3.02 | ||
| EV/EBITDA | 3.51 |
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.
- The decent profitability rating of BRFS may justify a higher PE ratio.
- BRFS's earnings are expected to decrease with -5.99% in the coming years. This may justify a cheaper valuation.
PEG (NY)0.46
PEG (5Y)0.22
EPS Next 2Y-3.05%
EPS Next 3Y-5.99%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 17.17%, BRFS is a good candidate for dividend investing.
- Compared to an average industry Dividend Yield of 2.29, BRFS pays a better dividend. On top of this BRFS pays more dividend than 98.88% of the companies listed in the same industry.
- BRFS's Dividend Yield is rather good when compared to the S&P500 average which is at 1.81.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 17.17% |
5.2 History
- On average, the dividend of BRFS grows each year by 6.52%, which is quite nice.
- BRFS has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)6.52%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
- BRFS pays out 31.92% of its income as dividend. This is a sustainable payout ratio.
DP31.92%
EPS Next 2Y-3.05%
EPS Next 3Y-5.99%
BRF SA / BRFS FAQ
Can you provide the ChartMill fundamental rating for BRF SA?
ChartMill assigns a fundamental rating of 6 / 10 to BRFS.
Can you provide the valuation status for BRF SA?
ChartMill assigns a valuation rating of 8 / 10 to BRF SA (BRFS). This can be considered as Undervalued.
What is the profitability of BRFS stock?
BRF SA (BRFS) has a profitability rating of 7 / 10.
Can you provide the financial health for BRFS stock?
The financial health rating of BRF SA (BRFS) is 5 / 10.
Can you provide the dividend sustainability for BRFS stock?
The dividend rating of BRF SA (BRFS) is 7 / 10 and the dividend payout ratio is 31.92%.