Discover BERKSHIRE HATHAWAY INC-CL B (NYSE:BRK.B)—an undervalued stock our stock screener has picked out. NYSE:BRK.B demonstrates solid fundamentals, including health and profitability, all while staying attractively priced. Let's explore the details.
Valuation Examination for NYSE:BRK.B
An integral part of ChartMill's stock analysis is the Valuation Rating, which spans from 0 to 10. This rating evaluates diverse valuation factors, including price to earnings and cash flows, while considering the stock's profitability and growth. NYSE:BRK.B has received a 9 out of 10:
- A Price/Earnings ratio of 0.02 indicates a rather cheap valuation of BRK.B.
- Compared to the rest of the industry, the Price/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.
- Compared to an average S&P500 Price/Earnings ratio of 25.79, BRK.B is valued rather cheaply.
- A Price/Forward Earnings ratio of 0.01 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.
- BRK.B is valuated cheaply when we compare the Price/Forward Earnings ratio to 18.89, which is the current average of the S&P500 Index.
- Based on the Enterprise Value to EBITDA ratio, BRK.B is valued cheaply inside the industry as 83.84% of the companies are valued more expensively.
- BRK.B's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. BRK.B is cheaper than 69.70% of the companies 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.
Looking at the Profitability
ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NYSE:BRK.B has earned a 7 out of 10:
- BRK.B has a Return On Assets of 8.34%. This is amongst the best in the industry. BRK.B outperforms 85.86% of its industry peers.
- The Return On Equity of BRK.B (16.09%) is better than 82.83% of its industry peers.
- The Return On Invested Capital of BRK.B (3.54%) is better than 74.75% of its industry peers.
- The last Return On Invested Capital (3.54%) for BRK.B is above the 3 year average (3.32%), which is a sign of increasing profitability.
- BRK.B's Profit Margin of 26.09% is amongst the best of 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.
Exploring NYSE:BRK.B's Health
ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NYSE:BRK.B scores a 5 out of 10:
- BRK.B's Altman-Z score of 1.65 is fine compared to the rest of the industry. BRK.B outperforms 70.71% of its industry peers.
- The Debt to FCF ratio of BRK.B (4.83) is better than 66.67% of its industry peers.
- BRK.B has a Debt/Equity ratio of 0.23. This is a healthy value indicating a solid balance between debt and equity.
- BRK.B has a Debt to Equity ratio of 0.23. This is in the better half of the industry: BRK.B outperforms 61.62% of its industry peers.
- BRK.B has a better Current ratio (1.47) than 63.64% of its industry peers.
How We Gauge Growth for NYSE:BRK.B
ChartMill assigns a Growth Rating to every stock. This score ranges from 0 to 10 and evaluates the different growth aspects like EPS and Revenue, both in the past as in the future. NYSE:BRK.B scores a 6 out of 10:
- The Earnings Per Share has grown by an nice 10.09% over the past year.
- 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.
- The Revenue has grown by 15.03% in the past year. This is quite good.
- Based on estimates for the next years, BRK.B will show a quite strong growth in Earnings Per Share. The EPS will grow by 12.33% on average per year.
- 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.
- The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
More Decent Value stocks can be found in our Decent Value screener.
For an up to date full fundamental analysis you can check the fundamental report of BRK.B
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.