BREAD FINANCIAL HOLDINGS INC (BFH) Stock Fundamental Analysis
NYSE:BFH - New York Stock Exchange, Inc. - US0185811082 - Common Stock - Currency: USD
We assign a fundamental rating of 4 out of 10 to BFH. BFH was compared to 52 industry peers in the Consumer Finance industry. While BFH is still in line with the averages on profitability rating, there are concerns on its financial health. BFH is cheap, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
In the past year BFH was profitable.
BFH had a positive operating cash flow in the past year.
BFH had positive earnings in each of the past 5 years.
Each year in the past 5 years BFH had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 1.25%, BFH is in line with its industry, outperforming 42.31% of the companies in the same industry.
BFH has a Return On Equity of 9.13%. This is comparable to the rest of the industry: BFH outperforms 48.08% of its industry peers.
BFH has a better Return On Invested Capital (4.36%) than 61.54% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for BFH is significantly below the industry average of 10.33%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.25% | ||
| ROE | 9.13% | ||
| ROIC | 4.36% |
ROA(3y)1.73%
ROA(5y)1.96%
ROE(3y)14.51%
ROE(5y)19.2%
ROIC(3y)4.4%
ROIC(5y)4.64%
1.3 Margins
BFH's Profit Margin of 6.11% is on the low side compared to the rest of the industry. BFH is outperformed by 65.38% of its industry peers.
In the last couple of years the Profit Margin of BFH has remained more or less at the same level.
With an excellent Operating Margin value of 28.52%, BFH belongs to the best of the industry, outperforming 86.54% of the companies in the same industry.
In the last couple of years the Operating Margin of BFH has remained more or less at the same level.
BFH has a better Gross Margin (93.00%) than 88.46% of its industry peers.
In the last couple of years the Gross Margin of BFH has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 28.52% | ||
| PM (TTM) | 6.11% | ||
| GM | 93% |
OM growth 3Y-9.81%
OM growth 5Y0.65%
PM growth 3Y-35.19%
PM growth 5Y0.78%
GM growth 3Y0.66%
GM growth 5Y0.7%
2. Health
2.1 Basic Checks
BFH has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
The number of shares outstanding for BFH has been reduced compared to 1 year ago.
Compared to 5 years ago, BFH has more shares outstanding
BFH has a better debt/assets ratio than last year.
2.2 Solvency
BFH has an Altman-Z score of 0.90. This is a bad value and indicates that BFH is not financially healthy and even has some risk of bankruptcy.
With a decent Altman-Z score value of 0.90, BFH is doing good in the industry, outperforming 63.46% of the companies in the same industry.
BFH has a debt to FCF ratio of 10.23. This is a negative value and a sign of low solvency as BFH would need 10.23 years to pay back of all of its debts.
With a Debt to FCF ratio value of 10.23, BFH perfoms like the industry average, outperforming 50.00% of the companies in the same industry.
BFH has a Debt/Equity ratio of 5.94. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 5.94, BFH is doing worse than 76.92% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 5.94 | ||
| Debt/FCF | 10.23 | ||
| Altman-Z | 0.9 |
ROIC/WACC1.66
WACC2.62%
2.3 Liquidity
BFH has a Current Ratio of 1.52. This is a normal value and indicates that BFH is financially healthy and should not expect problems in meeting its short term obligations.
With a Current ratio value of 1.52, BFH perfoms like the industry average, outperforming 59.62% of the companies in the same industry.
A Quick Ratio of 1.52 indicates that BFH should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.52, BFH perfoms like the industry average, outperforming 59.62% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.52 | ||
| Quick Ratio | 1.52 |
3. Growth
3.1 Past
The earnings per share for BFH have decreased strongly by -11.04% in the last year.
Measured over the past years, BFH shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -15.20% on average per year.
BFH shows a decrease in Revenue. In the last year, the revenue decreased by -4.58%.
The Revenue has been decreasing by -0.19% on average over the past years.
EPS 1Y (TTM)-11.04%
EPS 3Y-25.81%
EPS 5Y-15.2%
EPS Q2Q%2.96%
Revenue 1Y (TTM)-4.58%
Revenue growth 3Y8.3%
Revenue growth 5Y-0.19%
Sales Q2Q%-2.12%
3.2 Future
The Earnings Per Share is expected to decrease by -0.75% on average over the next years.
Based on estimates for the next years, BFH will show a small growth in Revenue. The Revenue will grow by 3.35% on average per year.
EPS Next Y-1.3%
EPS Next 2Y11.53%
EPS Next 3Y12.44%
EPS Next 5Y-0.75%
Revenue Next Year0.23%
Revenue Next 2Y2.18%
Revenue Next 3Y3.3%
Revenue Next 5Y3.35%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
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.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 6.91, which indicates a rather cheap valuation of BFH.
Compared to the rest of the industry, the Price/Earnings ratio of BFH indicates a somewhat cheap valuation: BFH is cheaper than 78.85% of the companies listed in the same industry.
BFH is valuated cheaply when we compare the Price/Earnings ratio to 26.53, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 5.62, which indicates a rather cheap valuation of BFH.
Based on the Price/Forward Earnings ratio, BFH is valued cheaper than 80.77% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of BFH to the average of the S&P500 Index (22.27), we can say BFH is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.91 | ||
| Fwd PE | 5.62 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of BFH indicates a rather cheap valuation: BFH is cheaper than 88.46% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of BFH indicates a rather cheap valuation: BFH is cheaper than 88.46% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 1.34 | ||
| EV/EBITDA | 2.37 |
4.3 Compensation for Growth
The decent profitability rating of BFH may justify a higher PE ratio.
A more expensive valuation may be justified as BFH's earnings are expected to grow with 12.44% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y11.53%
EPS Next 3Y12.44%
5. Dividend
5.1 Amount
BFH has a Yearly Dividend Yield of 1.70%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.69, BFH pays a bit more dividend than its industry peers.
Compared to the average S&P500 Dividend Yield of 2.39, BFH is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.7% |
5.2 History
The dividend of BFH decreases each year by -19.10%.
BFH has been paying a dividend for at least 10 years, so it has a reliable track record.
BFH has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)-19.1%
Div Incr Years0
Div Non Decr Years3
5.3 Sustainability
15.71% of the earnings are spent on dividend by BFH. This is a low number and sustainable payout ratio.
BFH's earnings and Dividend Rate are declining. This means the current dividend is most likely not sustainable.
DP15.71%
EPS Next 2Y11.53%
EPS Next 3Y12.44%
51.21
-0.35 (-0.68%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryConsumer Finance
Earnings (Last)
Earnings (Next)
Inst Owners102.44%
Inst Owner ChangeN/A
Ins Owners0.81%
Ins Owner Change11.38%
Market Cap2.38B
Analysts69
Price Target57.44 (12.17%)
Short Float %9.18%
Short Ratio4.16
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.7% |
Yearly Dividend0.87
Dividend Growth(5Y)-19.1%
DP15.71%
Div Incr Years0
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-17.93%
Min EPS beat(2)-58.34%
Max EPS beat(2)22.48%
EPS beat(4)2
Avg EPS beat(4)2.55%
Min EPS beat(4)-58.34%
Max EPS beat(4)48.84%
EPS beat(8)5
Avg EPS beat(8)124.28%
EPS beat(12)8
Avg EPS beat(12)79.12%
EPS beat(16)10
Avg EPS beat(16)63.5%
Revenue beat(2)1
Avg Revenue beat(2)-2.17%
Min Revenue beat(2)-5.07%
Max Revenue beat(2)0.74%
Revenue beat(4)2
Avg Revenue beat(4)-1.09%
Min Revenue beat(4)-5.07%
Max Revenue beat(4)0.8%
Revenue beat(8)4
Avg Revenue beat(8)0.96%
Revenue beat(12)8
Avg Revenue beat(12)5.84%
Revenue beat(16)9
Avg Revenue beat(16)2.05%
PT rev (1m)-6.27%
PT rev (3m)-20.35%
EPS NQ rev (1m)4.22%
EPS NQ rev (3m)-3.43%
EPS NY rev (1m)5.68%
EPS NY rev (3m)4.82%
Revenue NQ rev (1m)0.33%
Revenue NQ rev (3m)-1%
Revenue NY rev (1m)-0.13%
Revenue NY rev (3m)-0.73%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.91 | ||
| Fwd PE | 5.62 | ||
| P/S | 0.52 | ||
| P/FCF | 1.34 | ||
| P/OCF | 1.32 | ||
| P/B | 0.78 | ||
| P/tB | 1.02 | ||
| EV/EBITDA | 2.37 |
EPS(TTM)7.41
EY14.47%
EPS(NY)9.12
Fwd EY17.8%
FCF(TTM)38.26
FCFY74.71%
OCF(TTM)38.78
OCFY75.72%
SpS98.45
BVpS65.91
TBVpS50.05
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.25% | ||
| ROE | 9.13% | ||
| ROCE | 14.08% | ||
| ROIC | 4.36% | ||
| ROICexc | 5.37% | ||
| ROICexgc | 6.07% | ||
| OM | 28.52% | ||
| PM (TTM) | 6.11% | ||
| GM | 93% | ||
| FCFM | 38.86% |
ROA(3y)1.73%
ROA(5y)1.96%
ROE(3y)14.51%
ROE(5y)19.2%
ROIC(3y)4.4%
ROIC(5y)4.64%
ROICexc(3y)5.33%
ROICexc(5y)5.71%
ROICexgc(3y)5.64%
ROICexgc(5y)6.71%
ROCE(3y)16.5%
ROCE(5y)14.09%
ROICexcg growth 3Y3.7%
ROICexcg growth 5Y-10.26%
ROICexc growth 3Y3.14%
ROICexc growth 5Y-6.25%
OM growth 3Y-9.81%
OM growth 5Y0.65%
PM growth 3Y-35.19%
PM growth 5Y0.78%
GM growth 3Y0.66%
GM growth 5Y0.7%
F-Score6
Asset Turnover0.2
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 5.94 | ||
| Debt/FCF | 10.23 | ||
| Debt/EBITDA | 13.06 | ||
| Cap/Depr | 27.27% | ||
| Cap/Sales | 0.52% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 129.39% | ||
| Profit Quality | 636.07% | ||
| Current Ratio | 1.52 | ||
| Quick Ratio | 1.52 | ||
| Altman-Z | 0.9 |
F-Score6
WACC2.62%
ROIC/WACC1.66
Cap/Depr(3y)47.19%
Cap/Depr(5y)47.85%
Cap/Sales(3y)1.11%
Cap/Sales(5y)1.41%
Profit Quality(3y)575.46%
Profit Quality(5y)552.61%
High Growth Momentum
Growth
EPS 1Y (TTM)-11.04%
EPS 3Y-25.81%
EPS 5Y-15.2%
EPS Q2Q%2.96%
EPS Next Y-1.3%
EPS Next 2Y11.53%
EPS Next 3Y12.44%
EPS Next 5Y-0.75%
Revenue 1Y (TTM)-4.58%
Revenue growth 3Y8.3%
Revenue growth 5Y-0.19%
Sales Q2Q%-2.12%
Revenue Next Year0.23%
Revenue Next 2Y2.18%
Revenue Next 3Y3.3%
Revenue Next 5Y3.35%
EBIT growth 1Y-8.41%
EBIT growth 3Y-2.32%
EBIT growth 5Y0.46%
EBIT Next Year-70.19%
EBIT Next 3Y-28.03%
EBIT Next 5YN/A
FCF growth 1Y5.38%
FCF growth 3Y7.71%
FCF growth 5Y11.13%
OCF growth 1Y3.2%
OCF growth 3Y6.41%
OCF growth 5Y8.83%