BERKSHIRE HATHAWAY INC-CL B (BRK.B) Stock Fundamental Analysis
NYSE:BRK.B - New York Stock Exchange, Inc. - US0846707026 - Common Stock - Currency: USD
We assign a fundamental rating of 4 out of 10 to BRK.B. BRK.B was compared to 101 industry peers in the Financial Services industry. BRK.B has only an average score on both its financial health and profitability. BRK.B is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year BRK.B was profitable.
In the past year BRK.B had a positive cash flow from operations.
Of the past 5 years BRK.B 4 years were profitable.
Each year in the past 5 years BRK.B had a positive operating cash flow.
1.2 Ratios
With an excellent Return On Assets value of 7.71%, BRK.B belongs to the best of the industry, outperforming 86.14% of the companies in the same industry.
With a decent Return On Equity value of 13.70%, BRK.B is doing good in the industry, outperforming 65.35% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 4.68%, BRK.B is in the better half of the industry, outperforming 63.37% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for BRK.B is significantly below the industry average of 11.84%.
The 3 year average ROIC (4.13%) for BRK.B is below the current ROIC(4.68%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.71% | ||
| ROE | 13.7% | ||
| ROIC | 4.68% |
ROA(3y)4.77%
ROA(5y)5.71%
ROE(3y)8.68%
ROE(5y)10.68%
ROIC(3y)4.13%
ROIC(5y)3.72%
1.3 Margins
BRK.B has a Profit Margin of 23.96%. This is in the better half of the industry: BRK.B outperforms 77.23% of its industry peers.
BRK.B's Profit Margin has declined in the last couple of years.
With a Operating Margin value of 16.41%, BRK.B perfoms like the industry average, outperforming 54.46% of the companies in the same industry.
BRK.B's Operating Margin has improved in the last couple of years.
BRK.B's Gross Margin of 16.21% is on the low side compared to the rest of the industry. BRK.B is outperformed by 61.39% of its industry peers.
In the last couple of years the Gross Margin of BRK.B has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.41% | ||
| PM (TTM) | 23.96% | ||
| GM | 16.21% |
OM growth 3Y7.37%
OM growth 5Y4.91%
PM growth 3Y-9.72%
PM growth 5Y-5.61%
GM growth 3Y3.45%
GM growth 5Y2.09%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so BRK.B is destroying value.
The number of shares outstanding for BRK.B has been reduced compared to 1 year ago.
Compared to 5 years ago, BRK.B has less shares outstanding
Compared to 1 year ago, BRK.B has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.75 indicates that BRK.B is not a great score, but indicates only limited risk for bankruptcy at the moment.
BRK.B has a better Altman-Z score (2.75) than 84.16% of its industry peers.
BRK.B has a debt to FCF ratio of 10.74. This is a negative value and a sign of low solvency as BRK.B would need 10.74 years to pay back of all of its debts.
The Debt to FCF ratio of BRK.B (10.74) is comparable to the rest of the industry.
BRK.B has a Debt/Equity ratio of 0.19. This is a healthy value indicating a solid balance between debt and equity.
BRK.B has a Debt to Equity ratio of 0.19. This is in the better half of the industry: BRK.B outperforms 68.32% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.19 | ||
| Debt/FCF | 10.74 | ||
| Altman-Z | 2.75 |
ROIC/WACC0.5
WACC9.27%
2.3 Liquidity
A Current Ratio of 1.18 indicates that BRK.B should not have too much problems paying its short term obligations.
The Current ratio of BRK.B (1.18) is comparable to the rest of the industry.
BRK.B has a Quick Ratio of 1.18. This is a bad value and indicates that BRK.B is not financially healthy enough and could expect problems in meeting its short term obligations.
BRK.B's Quick ratio of 0.94 is in line compared to the rest of the industry. BRK.B outperforms 47.52% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.18 | ||
| Quick Ratio | 0.94 |
3. Growth
3.1 Past
BRK.B shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 27.98%, which is quite impressive.
Measured over the past years, BRK.B shows a quite strong growth in Earnings Per Share. The EPS has been growing by 17.78% on average per year.
The Revenue has been growing slightly by 1.91% in the past year.
Measured over the past years, BRK.B shows a small growth in Revenue. The Revenue has been growing by 7.84% on average per year.
EPS 1Y (TTM)27.98%
EPS 3Y21.97%
EPS 5Y17.78%
EPS Q2Q%71.86%
Revenue 1Y (TTM)1.91%
Revenue growth 3Y10.38%
Revenue growth 5Y7.84%
Sales Q2Q%1.65%
3.2 Future
BRK.B is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 2.27% yearly.
Based on estimates for the next years, BRK.B will show a small growth in Revenue. The Revenue will grow by 6.94% on average per year.
EPS Next Y-3.52%
EPS Next 2Y0.48%
EPS Next 3Y1.32%
EPS Next 5Y2.27%
Revenue Next Year0.01%
Revenue Next 2Y2.23%
Revenue Next 3Y0.14%
Revenue Next 5Y6.94%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 24.54, BRK.B is valued on the expensive side.
Based on the Price/Earnings ratio, BRK.B is valued a bit more expensive than the industry average as 64.36% of the companies are valued more cheaply.
The average S&P500 Price/Earnings ratio is at 28.18. BRK.B is around the same levels.
With a Price/Forward Earnings ratio of 25.44, BRK.B can be considered very expensive at the moment.
BRK.B's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. BRK.B is more expensive than 64.36% of the companies in the same industry.
BRK.B is valuated rather expensively when we compare the Price/Forward Earnings ratio to 20.81, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.54 | ||
| Fwd PE | 25.44 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of BRK.B is on the same level as its industry peers.
The rest of the industry has a similar Price/Free Cash Flow ratio as BRK.B.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 100.38 | ||
| EV/EBITDA | 16.81 |
4.3 Compensation for Growth
BRK.B has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.38
EPS Next 2Y0.48%
EPS Next 3Y1.32%
5. Dividend
5.1 Amount
BRK.B does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
539.8
+9.57 (+1.8%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners33.43%
Inst Owner Change0.29%
Ins Owners37.69%
Ins Owner ChangeN/A
Market Cap1165.97B
Analysts80
Price Target519.66 (-3.73%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)16.2%
Min EPS beat(2)-10.41%
Max EPS beat(2)42.8%
EPS beat(4)3
Avg EPS beat(4)16.14%
Min EPS beat(4)-10.41%
Max EPS beat(4)42.8%
EPS beat(8)6
Avg EPS beat(8)12.04%
EPS beat(12)9
Avg EPS beat(12)10.27%
EPS beat(16)12
Avg EPS beat(16)9.92%
Revenue beat(2)0
Avg Revenue beat(2)-3.85%
Min Revenue beat(2)-7.69%
Max Revenue beat(2)-0.01%
Revenue beat(4)1
Avg Revenue beat(4)-1.91%
Min Revenue beat(4)-7.69%
Max Revenue beat(4)0.24%
Revenue beat(8)4
Avg Revenue beat(8)0.64%
Revenue beat(12)5
Avg Revenue beat(12)-0.45%
Revenue beat(16)6
Avg Revenue beat(16)-0.71%
PT rev (1m)-1.72%
PT rev (3m)-0.09%
EPS NQ rev (1m)-2.65%
EPS NQ rev (3m)-4.77%
EPS NY rev (1m)-0.56%
EPS NY rev (3m)3.38%
Revenue NQ rev (1m)0.1%
Revenue NQ rev (3m)-0.79%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.04%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.54 | ||
| Fwd PE | 25.44 | ||
| P/S | 3.14 | ||
| P/FCF | 100.38 | ||
| P/OCF | 38.11 | ||
| P/B | 1.8 | ||
| P/tB | 2.2 | ||
| EV/EBITDA | 16.81 |
EPS(TTM)22
EY4.08%
EPS(NY)21.22
Fwd EY3.93%
FCF(TTM)5.38
FCFY1%
OCF(TTM)14.16
OCFY2.62%
SpS171.96
BVpS300.63
TBVpS245.24
PEG (NY)N/A
PEG (5Y)1.38
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.71% | ||
| ROE | 13.7% | ||
| ROCE | 5.79% | ||
| ROIC | 4.68% | ||
| ROICexc | 4.9% | ||
| ROICexgc | 5.89% | ||
| OM | 16.41% | ||
| PM (TTM) | 23.96% | ||
| GM | 16.21% | ||
| FCFM | 3.13% |
ROA(3y)4.77%
ROA(5y)5.71%
ROE(3y)8.68%
ROE(5y)10.68%
ROIC(3y)4.13%
ROIC(5y)3.72%
ROICexc(3y)4.31%
ROICexc(5y)3.94%
ROICexgc(3y)5.19%
ROICexgc(5y)4.78%
ROCE(3y)5.11%
ROCE(5y)4.61%
ROICexcg growth 3Y9.15%
ROICexcg growth 5Y4.04%
ROICexc growth 3Y9.9%
ROICexc growth 5Y4.98%
OM growth 3Y7.37%
OM growth 5Y4.91%
PM growth 3Y-9.72%
PM growth 5Y-5.61%
GM growth 3Y3.45%
GM growth 5Y2.09%
F-Score4
Asset Turnover0.32
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.19 | ||
| Debt/FCF | 10.74 | ||
| Debt/EBITDA | 1.69 | ||
| Cap/Depr | 147.62% | ||
| Cap/Sales | 5.11% | ||
| Interest Coverage | 12.34 | ||
| Cash Conversion | 41.46% | ||
| Profit Quality | 13.05% | ||
| Current Ratio | 1.18 | ||
| Quick Ratio | 0.94 | ||
| Altman-Z | 2.75 |
F-Score4
WACC9.27%
ROIC/WACC0.5
Cap/Depr(3y)148.32%
Cap/Depr(5y)138.32%
Cap/Sales(3y)5.18%
Cap/Sales(5y)5.13%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)27.98%
EPS 3Y21.97%
EPS 5Y17.78%
EPS Q2Q%71.86%
EPS Next Y-3.52%
EPS Next 2Y0.48%
EPS Next 3Y1.32%
EPS Next 5Y2.27%
Revenue 1Y (TTM)1.91%
Revenue growth 3Y10.38%
Revenue growth 5Y7.84%
Sales Q2Q%1.65%
Revenue Next Year0.01%
Revenue Next 2Y2.23%
Revenue Next 3Y0.14%
Revenue Next 5Y6.94%
EBIT growth 1Y26.05%
EBIT growth 3Y18.52%
EBIT growth 5Y13.14%
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-61%
FCF growth 3Y-23.7%
FCF growth 5Y-12.55%
OCF growth 1Y-37.82%
OCF growth 3Y-8.11%
OCF growth 5Y-4.59%