BROWN-FORMAN CORP-CLASS A (BF.A) Stock Fundamental Analysis
NYSE:BF.A - New York Stock Exchange, Inc. - US1156371007 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to BF.A. BF.A was compared to 32 industry peers in the Beverages industry. BF.A scores excellent points on both the profitability and health parts. This is a solid base for a good stock. BF.A has a valuation in line with the averages, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
BF.A had positive earnings in the past year.
In the past year BF.A had a positive cash flow from operations.
In the past 5 years BF.A has always been profitable.
In the past 5 years BF.A always reported a positive cash flow from operatings.
1.2 Ratios
With an excellent Return On Assets value of 12.25%, BF.A belongs to the best of the industry, outperforming 87.50% of the companies in the same industry.
Looking at the Return On Equity, with a value of 25.87%, BF.A belongs to the top of the industry, outperforming 81.25% of the companies in the same industry.
BF.A has a better Return On Invested Capital (12.72%) than 71.88% of its industry peers.
The Average Return On Invested Capital over the past 3 years for BF.A is above the industry average of 11.98%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.25% | ||
| ROE | 25.87% | ||
| ROIC | 12.72% |
ROA(3y)11.92%
ROA(5y)12.79%
ROE(3y)27.9%
ROE(5y)31.91%
ROIC(3y)14.71%
ROIC(5y)14.95%
1.3 Margins
BF.A has a better Profit Margin (24.45%) than 96.88% of its industry peers.
BF.A's Profit Margin has been stable in the last couple of years.
BF.A has a better Operating Margin (28.43%) than 87.50% of its industry peers.
BF.A's Operating Margin has declined in the last couple of years.
BF.A's Gross Margin of 59.31% is amongst the best of the industry. BF.A outperforms 81.25% of its industry peers.
In the last couple of years the Gross Margin of BF.A has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 28.43% | ||
| PM (TTM) | 24.45% | ||
| GM | 59.31% |
OM growth 3Y-2.74%
OM growth 5Y-4.4%
PM growth 3Y-2.06%
PM growth 5Y-0.49%
GM growth 3Y-0.02%
GM growth 5Y-1.49%
2. Health
2.1 Basic Checks
BF.A has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
BF.A has less shares outstanding than it did 1 year ago.
The number of shares outstanding for BF.A has been reduced compared to 5 years ago.
The debt/assets ratio for BF.A is higher compared to a year ago.
2.2 Solvency
BF.A has an Altman-Z score of 4.53. This indicates that BF.A is financially healthy and has little risk of bankruptcy at the moment.
BF.A has a better Altman-Z score (4.53) than 78.13% of its industry peers.
The Debt to FCF ratio of BF.A is 5.36, which is a neutral value as it means it would take BF.A, 5.36 years of fcf income to pay off all of its debts.
BF.A has a Debt to FCF ratio of 5.36. This is in the better half of the industry: BF.A outperforms 65.63% of its industry peers.
A Debt/Equity ratio of 0.67 indicates that BF.A is somewhat dependend on debt financing.
BF.A has a Debt to Equity ratio of 0.67. This is comparable to the rest of the industry: BF.A outperforms 53.13% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.67 | ||
| Debt/FCF | 5.36 | ||
| Altman-Z | 4.53 |
ROIC/WACC1.58
WACC8.07%
2.3 Liquidity
BF.A has a Current Ratio of 3.49. This indicates that BF.A is financially healthy and has no problem in meeting its short term obligations.
Looking at the Current ratio, with a value of 3.49, BF.A belongs to the top of the industry, outperforming 87.50% of the companies in the same industry.
BF.A has a Quick Ratio of 1.49. This is a normal value and indicates that BF.A is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of BF.A (1.49) is better than 71.88% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.49 | ||
| Quick Ratio | 1.49 |
3. Growth
3.1 Past
BF.A shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -2.99%.
Measured over the past 5 years, BF.A shows a small growth in Earnings Per Share. The EPS has been growing by 4.35% on average per year.
BF.A shows a decrease in Revenue. In the last year, the revenue decreased by -5.05%.
BF.A shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.68% yearly.
EPS 1Y (TTM)-2.99%
EPS 3Y10.18%
EPS 5Y4.35%
EPS Q2Q%-28.33%
Revenue 1Y (TTM)-5.05%
Revenue growth 3Y6.48%
Revenue growth 5Y4.68%
Sales Q2Q%-3.18%
3.2 Future
BF.A is expected to show a decrease in Earnings Per Share. In the coming years, the EPS will decrease by -1.23% yearly.
BF.A is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 0.47% yearly.
EPS Next Y-13.22%
EPS Next 2Y-5.9%
EPS Next 3Y-1.23%
EPS Next 5YN/A
Revenue Next Year-4.6%
Revenue Next 2Y-1.33%
Revenue Next 3Y0.47%
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
BF.A is valuated rather expensively with a Price/Earnings ratio of 17.60.
62.50% of the companies in the same industry are more expensive than BF.A, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of BF.A to the average of the S&P500 Index (28.22), we can say BF.A is valued slightly cheaper.
A Price/Forward Earnings ratio of 18.11 indicates a rather expensive valuation of BF.A.
68.75% of the companies in the same industry are more expensive than BF.A, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of BF.A to the average of the S&P500 Index (20.86), we can say BF.A is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.6 | ||
| Fwd PE | 18.11 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as BF.A.
BF.A's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.38 | ||
| EV/EBITDA | 14.78 |
4.3 Compensation for Growth
BF.A has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)4.05
EPS Next 2Y-5.9%
EPS Next 3Y-1.23%
5. Dividend
5.1 Amount
BF.A has a Yearly Dividend Yield of 2.65%. Purely for dividend investing, there may be better candidates out there.
BF.A's Dividend Yield is a higher than the industry average which is at 3.05.
BF.A's Dividend Yield is comparable with the S&P500 average which is at 2.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.65% |
5.2 History
The dividend of BF.A has a limited annual growth rate of 5.58%.
BF.A has paid a dividend for at least 10 years, which is a reliable track record.
The dividend of BF.A decreased recently.
Dividend Growth(5Y)5.58%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
42.16% of the earnings are spent on dividend by BF.A. This is a bit on the high side, but may be sustainable.
DP42.16%
EPS Next 2Y-5.9%
EPS Next 3Y-1.23%
34.32
0 (0%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryBeverages
Earnings (Last)
Earnings (Next)
Inst Owners61.05%
Inst Owner Change1.08%
Ins Owners0.39%
Ins Owner ChangeN/A
Market Cap16.22B
Analysts56
Price Target40.31 (17.45%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.65% |
Yearly Dividend0.85
Dividend Growth(5Y)5.58%
DP42.16%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.68%
Min EPS beat(2)-8.35%
Max EPS beat(2)9.71%
EPS beat(4)2
Avg EPS beat(4)4.88%
Min EPS beat(4)-12.45%
Max EPS beat(4)30.61%
EPS beat(8)3
Avg EPS beat(8)0.91%
EPS beat(12)5
Avg EPS beat(12)-2.92%
EPS beat(16)6
Avg EPS beat(16)-3.66%
Revenue beat(2)0
Avg Revenue beat(2)-2.83%
Min Revenue beat(2)-5.48%
Max Revenue beat(2)-0.18%
Revenue beat(4)0
Avg Revenue beat(4)-5.06%
Min Revenue beat(4)-8.1%
Max Revenue beat(4)-0.18%
Revenue beat(8)1
Avg Revenue beat(8)-4.03%
Revenue beat(12)4
Avg Revenue beat(12)-0.88%
Revenue beat(16)7
Avg Revenue beat(16)-0.25%
PT rev (1m)-10.77%
PT rev (3m)-15.88%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-12.36%
EPS NY rev (1m)0%
EPS NY rev (3m)0.89%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-4.02%
Revenue NY rev (1m)-1.6%
Revenue NY rev (3m)-1.74%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.6 | ||
| Fwd PE | 18.11 | ||
| P/S | 4.01 | ||
| P/FCF | 30.38 | ||
| P/OCF | 22.19 | ||
| P/B | 4.24 | ||
| P/tB | 11.46 | ||
| EV/EBITDA | 14.78 |
EPS(TTM)1.95
EY5.68%
EPS(NY)1.89
Fwd EY5.52%
FCF(TTM)1.13
FCFY3.29%
OCF(TTM)1.55
OCFY4.51%
SpS8.56
BVpS8.09
TBVpS2.99
PEG (NY)N/A
PEG (5Y)4.05
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.25% | ||
| ROE | 25.87% | ||
| ROCE | 16.8% | ||
| ROIC | 12.72% | ||
| ROICexc | 13.9% | ||
| ROICexgc | 22.19% | ||
| OM | 28.43% | ||
| PM (TTM) | 24.45% | ||
| GM | 59.31% | ||
| FCFM | 13.2% |
ROA(3y)11.92%
ROA(5y)12.79%
ROE(3y)27.9%
ROE(5y)31.91%
ROIC(3y)14.71%
ROIC(5y)14.95%
ROICexc(3y)16.39%
ROICexc(5y)17.15%
ROICexgc(3y)25.33%
ROICexgc(5y)25.78%
ROCE(3y)19.43%
ROCE(5y)19.94%
ROICexcg growth 3Y-4.95%
ROICexcg growth 5Y-6.95%
ROICexc growth 3Y-7.74%
ROICexc growth 5Y-8.21%
OM growth 3Y-2.74%
OM growth 5Y-4.4%
PM growth 3Y-2.06%
PM growth 5Y-0.49%
GM growth 3Y-0.02%
GM growth 5Y-1.49%
F-Score5
Asset Turnover0.5
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.67 | ||
| Debt/FCF | 5.36 | ||
| Debt/EBITDA | 2.07 | ||
| Cap/Depr | 226.44% | ||
| Cap/Sales | 4.87% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 59.09% | ||
| Profit Quality | 53.99% | ||
| Current Ratio | 3.49 | ||
| Quick Ratio | 1.49 | ||
| Altman-Z | 4.53 |
F-Score5
WACC8.07%
ROIC/WACC1.58
Cap/Depr(3y)217.19%
Cap/Depr(5y)179.36%
Cap/Sales(3y)4.34%
Cap/Sales(5y)3.69%
Profit Quality(3y)65.27%
Profit Quality(5y)70.45%
High Growth Momentum
Growth
EPS 1Y (TTM)-2.99%
EPS 3Y10.18%
EPS 5Y4.35%
EPS Q2Q%-28.33%
EPS Next Y-13.22%
EPS Next 2Y-5.9%
EPS Next 3Y-1.23%
EPS Next 5YN/A
Revenue 1Y (TTM)-5.05%
Revenue growth 3Y6.48%
Revenue growth 5Y4.68%
Sales Q2Q%-3.18%
Revenue Next Year-4.6%
Revenue Next 2Y-1.33%
Revenue Next 3Y0.47%
Revenue Next 5YN/A
EBIT growth 1Y-7.78%
EBIT growth 3Y3.56%
EBIT growth 5Y0.07%
EBIT Next Year-5.19%
EBIT Next 3Y2.59%
EBIT Next 5YN/A
FCF growth 1Y10.79%
FCF growth 3Y-17.71%
FCF growth 5Y-9.2%
OCF growth 1Y10.26%
OCF growth 3Y-7.48%
OCF growth 5Y-4.16%