BERKSHIRE HATHAWAY INC-CL B (BRK.B) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:BRK.B - US0846707026 - Common Stock
478.97 USD
-5.52 (-1.14%)
479.35 USD
+0.38 (+0.08%)
Taking everything into account, BRK.B scores 4 out of 10 in our fundamental rating. BRK.B was compared to 97 industry peers in the Financial Services industry. Both the profitability and the financial health of BRK.B get a neutral evaluation. Nothing too spectacular is happening here. BRK.B is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
- In the past year BRK.B was profitable.
- In the past year BRK.B had a positive cash flow from operations.
- BRK.B had positive earnings in 4 of the past 5 years.
- Each year in the past 5 years BRK.B had a positive operating cash flow.
1.2 Ratios
- Looking at the Return On Assets, with a value of 5.50%, BRK.B is in the better half of the industry, outperforming 77.32% of the companies in the same industry.
- The Return On Equity of BRK.B (9.66%) is comparable to the rest of the industry.
- With a decent Return On Invested Capital value of 4.53%, BRK.B is doing good in the industry, outperforming 63.92% of the companies in the same industry.
- Measured over the past 3 years, the Average Return On Invested Capital for BRK.B is below the industry average of 8.46%.
- The 3 year average ROIC (4.13%) for BRK.B is below the current ROIC(4.53%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.5% | ||
| ROE | 9.66% | ||
| ROIC | 4.53% |
ROA(3y)4.77%
ROA(5y)5.71%
ROE(3y)8.68%
ROE(5y)10.68%
ROIC(3y)4.13%
ROIC(5y)3.72%
1.3 Margins
- Looking at the Profit Margin, with a value of 18.13%, BRK.B is in the better half of the industry, outperforming 70.10% of the companies in the same industry.
- BRK.B's Profit Margin has declined in the last couple of years.
- BRK.B has a Operating Margin of 16.72%. This is in the better half of the industry: BRK.B outperforms 60.82% of its industry peers.
- In the last couple of years the Operating Margin of BRK.B has grown nicely.
- Looking at the Gross Margin, with a value of 17.71%, BRK.B is doing worse than 61.86% of the companies in the same industry.
- BRK.B's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.72% | ||
| PM (TTM) | 18.13% | ||
| GM | 17.71% |
OM growth 3Y7.37%
OM growth 5Y4.91%
PM growth 3Y-9.72%
PM growth 5Y-5.61%
GM growth 3Y3.45%
GM growth 5Y2.09%
2. Health
2.1 Basic Checks
- BRK.B has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
- BRK.B has less shares outstanding than it did 1 year ago.
- The number of shares outstanding for BRK.B has been reduced compared to 5 years ago.
- Compared to 1 year ago, BRK.B has an improved debt to assets ratio.
2.2 Solvency
- An Altman-Z score of 2.53 indicates that BRK.B is not a great score, but indicates only limited risk for bankruptcy at the moment.
- BRK.B has a better Altman-Z score (2.53) than 81.44% of its industry peers.
- The Debt to FCF ratio of BRK.B is 6.58, which is on the high side as it means it would take BRK.B, 6.58 years of fcf income to pay off all of its debts.
- BRK.B's Debt to FCF ratio of 6.58 is in line compared to the rest of the industry. BRK.B outperforms 56.70% of its industry peers.
- A Debt/Equity ratio of 0.18 indicates that BRK.B is not too dependend on debt financing.
- Looking at the Debt to Equity ratio, with a value of 0.18, BRK.B is in the better half of the industry, outperforming 64.95% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.18 | ||
| Debt/FCF | 6.58 | ||
| Altman-Z | 2.53 |
ROIC/WACC0.55
WACC8.26%
2.3 Liquidity
- A Current Ratio of 1.33 indicates that BRK.B should not have too much problems paying its short term obligations.
- With a decent Current ratio value of 1.33, BRK.B is doing good in the industry, outperforming 62.89% of the companies in the same industry.
- BRK.B has a Quick Ratio of 1.11. This is a normal value and indicates that BRK.B is financially healthy and should not expect problems in meeting its short term obligations.
- BRK.B has a Quick ratio of 1.11. This is comparable to the rest of the industry: BRK.B outperforms 54.64% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.33 | ||
| Quick Ratio | 1.11 |
3. Growth
3.1 Past
- BRK.B shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 17.97%, which is quite good.
- BRK.B shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 17.78% yearly.
- The Revenue has been growing slightly by 0.60% in the past year.
- Measured over the past years, BRK.B shows a small growth in Revenue. The Revenue has been growing by 7.84% on average per year.
EPS 1Y (TTM)17.97%
EPS 3Y21.97%
EPS 5Y17.78%
EPS Q2Q%33.51%
Revenue 1Y (TTM)0.6%
Revenue growth 3Y10.38%
Revenue growth 5Y7.84%
Sales Q2Q%2.13%
3.2 Future
- Based on estimates for the next years, BRK.B will show a small growth in Earnings Per Share. The EPS will grow by 2.26% on average per year.
- Based on estimates for the next years, BRK.B will show a small growth in Revenue. The Revenue will grow by 4.89% on average per year.
EPS Next Y-0.33%
EPS Next 2Y0.31%
EPS Next 3Y1.09%
EPS Next 5Y2.26%
Revenue Next Year0.8%
Revenue Next 2Y0.25%
Revenue Next 3Y1.4%
Revenue Next 5Y4.89%
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
- A Price/Earnings ratio of 21.17 indicates a rather expensive valuation of BRK.B.
- BRK.B's Price/Earnings ratio is in line with the industry average.
- BRK.B is valuated rather cheaply when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
- The Price/Forward Earnings ratio is 21.64, which indicates a rather expensive current valuation of BRK.B.
- BRK.B's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. BRK.B is more expensive than 61.86% of the companies in the same industry.
- BRK.B is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 25.98, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.17 | ||
| Fwd PE | 21.64 |
4.2 Price Multiples
- BRK.B's Enterprise Value to EBITDA ratio is in line with the industry average.
- BRK.B's Price/Free Cash Flow ratio is a bit more expensive when compared to the industry. BRK.B is more expensive than 61.86% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 53.53 | ||
| EV/EBITDA | 14.35 |
4.3 Compensation for Growth
- The decent profitability rating of BRK.B may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.19
EPS Next 2Y0.31%
EPS Next 3Y1.09%
5. Dividend
5.1 Amount
- No dividends for BRK.B!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
BERKSHIRE HATHAWAY INC-CL B / BRK.B FAQ
What is the ChartMill fundamental rating of BERKSHIRE HATHAWAY INC-CL B (BRK.B) stock?
ChartMill assigns a fundamental rating of 4 / 10 to BRK.B.
What is the valuation status for BRK.B stock?
ChartMill assigns a valuation rating of 2 / 10 to BERKSHIRE HATHAWAY INC-CL B (BRK.B). This can be considered as Overvalued.
What is the profitability of BRK.B stock?
BERKSHIRE HATHAWAY INC-CL B (BRK.B) has a profitability rating of 6 / 10.
Can you provide the PE and PB ratios for BRK.B stock?
The Price/Earnings (PE) ratio for BERKSHIRE HATHAWAY INC-CL B (BRK.B) is 21.17 and the Price/Book (PB) ratio is 1.48.