BROWN-FORMAN CORP-CLASS A (BF.A) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:BF.A - US1156371007 - Common Stock
26.97 USD
-0.16 (-0.59%)
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 gets an excellent profitability rating and is at the same time showing great financial health properties. BF.A has a valuation in line with the averages, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
- In the past year BF.A was profitable.
- In the past year BF.A had a positive cash flow from operations.
- Each year in the past 5 years BF.A has been profitable.
- BF.A had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- BF.A's Return On Assets of 9.85% is fine compared to the rest of the industry. BF.A outperforms 75.00% of its industry peers.
- With a decent Return On Equity value of 19.59%, BF.A is doing good in the industry, outperforming 65.63% of the companies in the same industry.
- BF.A's Return On Invested Capital of 13.06% is fine compared to the rest of the industry. BF.A outperforms 75.00% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for BF.A is in line with the industry average of 11.62%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.85% | ||
| ROE | 19.59% | ||
| ROIC | 13.06% |
ROA(3y)11.12%
ROA(5y)12.07%
ROE(3y)24.95%
ROE(5y)27.89%
ROIC(3y)13.49%
ROIC(5y)14.53%
1.3 Margins
- BF.A has a better Profit Margin (20.83%) than 87.50% of its industry peers.
- BF.A's Profit Margin has declined in the last couple of years.
- Looking at the Operating Margin, with a value of 29.65%, BF.A belongs to the top of the industry, outperforming 87.50% of the companies in the same industry.
- BF.A's Operating Margin has been stable in the last couple of years.
- Looking at the Gross Margin, with a value of 59.12%, BF.A belongs to the top of the industry, outperforming 81.25% of the companies in the same industry.
- BF.A's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 29.65% | ||
| PM (TTM) | 20.83% | ||
| GM | 59.12% |
OM growth 3Y0.25%
OM growth 5Y-1.49%
PM growth 3Y0.86%
PM growth 5Y-2.33%
GM growth 3Y-1.02%
GM growth 5Y-1.4%
2. Health
2.1 Basic Checks
- BF.A has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
- Compared to 1 year ago, BF.A has about the same amount of shares outstanding.
- BF.A has less shares outstanding than it did 5 years ago.
- The debt/assets ratio for BF.A has been reduced compared to a year ago.
2.2 Solvency
- An Altman-Z score of 4.06 indicates that BF.A is not in any danger for bankruptcy at the moment.
- BF.A has a better Altman-Z score (4.06) than 75.00% of its industry peers.
- BF.A has a debt to FCF ratio of 4.34. This is a neutral value as BF.A would need 4.34 years to pay back of all of its debts.
- Looking at the Debt to FCF ratio, with a value of 4.34, BF.A is in the better half of the industry, outperforming 71.88% of the companies in the same industry.
- BF.A has a Debt/Equity ratio of 0.56. This is a neutral value indicating BF.A is somewhat dependend on debt financing.
- With a Debt to Equity ratio value of 0.56, BF.A perfoms like the industry average, outperforming 50.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.56 | ||
| Debt/FCF | 4.34 | ||
| Altman-Z | 4.06 |
ROIC/WACC1.67
WACC7.82%
2.3 Liquidity
- BF.A has a Current Ratio of 2.97. 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 2.97, BF.A belongs to the top of the industry, outperforming 81.25% of the companies in the same industry.
- BF.A has a Quick Ratio of 1.17. This is a normal value and indicates that BF.A is financially healthy and should not expect problems in meeting its short term obligations.
- BF.A's Quick ratio of 1.17 is fine compared to the rest of the industry. BF.A outperforms 71.88% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.97 | ||
| Quick Ratio | 1.17 |
3. Growth
3.1 Past
- The earnings per share for BF.A have decreased strongly by -25.94% in the last year.
- BF.A shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -0.35% yearly.
- BF.A shows a decrease in Revenue. In the last year, the revenue decreased by -4.66%.
- BF.A shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.40% yearly.
EPS 1Y (TTM)-25.94%
EPS 3Y-0.77%
EPS 5Y-0.35%
EPS Q2Q%-14.55%
Revenue 1Y (TTM)-4.66%
Revenue growth 3Y0.35%
Revenue growth 5Y3.4%
Sales Q2Q%-5.39%
3.2 Future
- BF.A is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 4.01% yearly.
- The Revenue is expected to grow by 0.01% on average over the next years.
EPS Next Y-0.66%
EPS Next 2Y2.18%
EPS Next 3Y4.01%
EPS Next 5YN/A
Revenue Next Year-5.06%
Revenue Next 2Y-1.73%
Revenue Next 3Y0.01%
Revenue Next 5YN/A
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 17.18, the valuation of BF.A can be described as rather expensive.
- BF.A's Price/Earnings ratio is in line with the industry average.
- When comparing the Price/Earnings ratio of BF.A to the average of the S&P500 Index (28.82), we can say BF.A is valued slightly cheaper.
- Based on the Price/Forward Earnings ratio of 15.19, the valuation of BF.A can be described as correct.
- 65.63% of the companies in the same industry are more expensive than BF.A, based on the Price/Forward Earnings ratio.
- The average S&P500 Price/Forward Earnings ratio is at 25.95. BF.A is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.18 | ||
| Fwd PE | 15.19 |
4.2 Price Multiples
- BF.A's Enterprise Value to EBITDA ratio is in line with the industry average.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of BF.A is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.9 | ||
| EV/EBITDA | 12.04 |
4.3 Compensation for Growth
- BF.A has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y2.18%
EPS Next 3Y4.01%
5. Dividend
5.1 Amount
- BF.A has a Yearly Dividend Yield of 3.31%.
- BF.A's Dividend Yield is rather good when compared to the industry average which is at 1.66. BF.A pays more dividend than 81.25% of the companies in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.82, BF.A pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.31% |
5.2 History
- The dividend of BF.A has a limited annual growth rate of 5.49%.
- BF.A has paid a dividend for at least 10 years, which is a reliable track record.
- The dividend of BF.A decreased in the last 3 years.
Dividend Growth(5Y)5.49%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
- BF.A pays out 52.84% of its income as dividend. This is a bit on the high side, but may be sustainable.
- BF.A's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP52.84%
EPS Next 2Y2.18%
EPS Next 3Y4.01%
BROWN-FORMAN CORP-CLASS A / BF.A FAQ
What is the fundamental rating for BF.A stock?
ChartMill assigns a fundamental rating of 6 / 10 to BF.A.
What is the valuation status for BF.A stock?
ChartMill assigns a valuation rating of 4 / 10 to BROWN-FORMAN CORP-CLASS A (BF.A). This can be considered as Fairly Valued.
Can you provide the profitability details for BROWN-FORMAN CORP-CLASS A?
BROWN-FORMAN CORP-CLASS A (BF.A) has a profitability rating of 7 / 10.
What is the earnings growth outlook for BROWN-FORMAN CORP-CLASS A?
The Earnings per Share (EPS) of BROWN-FORMAN CORP-CLASS A (BF.A) is expected to decline by -0.66% in the next year.
Is the dividend of BROWN-FORMAN CORP-CLASS A sustainable?
The dividend rating of BROWN-FORMAN CORP-CLASS A (BF.A) is 5 / 10 and the dividend payout ratio is 52.84%.