For those who appreciate value investing, NYSE:BRK.B is a compelling option with its solid fundamentals.

Last update: Sep 25, 2023

Consider BERKSHIRE HATHAWAY INC-CL B (NYSE:BRK.B) as a top value stock, identified by our stock screening tool. NYSE:BRK.B shines in terms of profitability, solvency, and liquidity, all while remaining very reasonably priced. Let's dive deeper into the analysis.

Valuation Analysis for NYSE:BRK.B

ChartMill assigns a Valuation Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing different valuation elements, such as price to earnings and free cash flow, both in absolute terms and relative to the market and industry. In the case of NYSE:BRK.B, the assigned 9 reflects its valuation:

With a Price/Earnings ratio of 0.02, the valuation of BRK.B can be described as very cheap.
BRK.B's Price/Earnings ratio is rather cheap when compared to the industry. BRK.B is cheaper than 100.00% of the companies in the same industry.
BRK.B's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.89.
The Price/Forward Earnings ratio is 0.01, which indicates a rather cheap valuation of BRK.B.
Compared to the rest of the industry, the Price/Forward Earnings ratio of BRK.B indicates a rather cheap valuation: BRK.B is cheaper than 100.00% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 18.97. BRK.B is valued rather cheaply when compared to this.
BRK.B's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. BRK.B is cheaper than 83.84% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of BRK.B indicates a somewhat cheap valuation: BRK.B is cheaper than 69.70% of the companies listed in the same industry.
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
BRK.B has a very decent profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as BRK.B's earnings are expected to grow with 12.33% in the coming years.

What does the Profitability looks like for NYSE:BRK.B

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NYSE:BRK.B, the assigned 7 is noteworthy for profitability:

BRK.B's Return On Assets of 8.34% is amongst the best of the industry. BRK.B outperforms 85.86% of its industry peers.
With an excellent Return On Equity value of 16.09%, BRK.B belongs to the best of the industry, outperforming 82.83% of the companies in the same industry.
The Return On Invested Capital of BRK.B (3.54%) is better than 74.75% of its industry peers.
The 3 year average ROIC (3.32%) for BRK.B is below the current ROIC(3.54%), indicating increased profibility in the last year.
BRK.B has a Profit Margin of 26.09%. This is amongst the best in the industry. BRK.B outperforms 83.84% of its industry peers.
BRK.B's Operating Margin has improved in the last couple of years.
BRK.B's Gross Margin has improved in the last couple of years.

Health Examination for NYSE:BRK.B

ChartMill assigns a proprietary Health Rating to each stock. The score is computed by evaluating various liquidity and solvency ratios and ranges from 0 to 10. NYSE:BRK.B was assigned a score of 5 for health:

With a decent Altman-Z score value of 1.65, BRK.B is doing good in the industry, outperforming 70.71% of the companies in the same industry.
BRK.B's Debt to FCF ratio of 4.83 is fine compared to the rest of the industry. BRK.B outperforms 66.67% of its industry peers.
A Debt/Equity ratio of 0.23 indicates that BRK.B is not too dependend on debt financing.
The Debt to Equity ratio of BRK.B (0.23) is better than 61.62% of its industry peers.
BRK.B's Current ratio of 1.47 is fine compared to the rest of the industry. BRK.B outperforms 63.64% of its industry peers.

Growth Insights: NYSE:BRK.B

Every stock receives a Growth Rating from ChartMill, ranging from 0 to 10. This rating assesses various growth aspects, including historical and projected EPS and revenue growth. NYSE:BRK.B boasts a 6 out of 10:

BRK.B shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 10.09%, 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 18.98% yearly.
Looking at the last year, BRK.B shows a quite strong growth in Revenue. The Revenue has grown by 15.03% in the last year.
The Earnings Per Share is expected to grow by 12.33% on average over the next years. This is quite good.
Based on estimates for the next years, BRK.B will show a quite strong growth in Revenue. The Revenue will grow by 13.58% on average per year.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

More Decent Value stocks can be found in our Decent Value screener.

Our latest full fundamental report of BRK.B contains the most current fundamental analsysis.

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.