BERKSHIRE HATHAWAY INC-CL B (BRK.B) Stock Fundamental Analysis
NYSE:BRK.B - New York Stock Exchange, Inc. - US0846707026 - Common Stock - Currency: USD
BRK.B gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 100 industry peers in the Financial Services industry. Both the profitability and the financial health of BRK.B get a neutral evaluation. Nothing too spectacular is happening here. While showing a medium growth rate, BRK.B is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
In the past year BRK.B was profitable.
BRK.B had a positive operating cash flow in the past year.
BRK.B had positive earnings in 4 of the past 5 years.
BRK.B had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of BRK.B (6.95%) is better than 84.00% of its industry peers.
BRK.B has a better Return On Equity (12.36%) than 63.00% of its industry peers.
The Return On Invested Capital of BRK.B (4.50%) is comparable to the rest of the industry.
Measured over the past 3 years, the Average Return On Invested Capital for BRK.B is significantly below the industry average of 11.97%.
The last Return On Invested Capital (4.50%) for BRK.B is above the 3 year average (4.13%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.95% | ||
| ROE | 12.36% | ||
| ROIC | 4.5% |
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 better Profit Margin (21.79%) than 77.00% of its industry peers.
BRK.B's Profit Margin has declined in the last couple of years.
BRK.B's Operating Margin of 15.89% is in line compared to the rest of the industry. BRK.B outperforms 57.00% of its industry peers.
BRK.B's Operating Margin has improved in the last couple of years.
BRK.B has a Gross Margin of 16.43%. This is in the lower half of the industry: BRK.B underperforms 62.00% of its industry peers.
In the last couple of years the Gross Margin of BRK.B has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.89% | ||
| PM (TTM) | 21.79% | ||
| GM | 16.43% |
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.
BRK.B has less shares outstanding than it did 1 year ago.
BRK.B has less shares outstanding than it did 5 years ago.
The debt/assets ratio for BRK.B has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 2.62 indicates that BRK.B is not a great score, but indicates only limited risk for bankruptcy at the moment.
BRK.B has a Altman-Z score of 2.62. This is amongst the best in the industry. BRK.B outperforms 83.00% of its industry peers.
BRK.B has a debt to FCF ratio of 10.44. This is a negative value and a sign of low solvency as BRK.B would need 10.44 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 10.44, BRK.B is in line with its industry, outperforming 54.00% of the companies in the same industry.
BRK.B has a Debt/Equity ratio of 0.19. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of BRK.B (0.19) is better than 67.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.19 | ||
| Debt/FCF | 10.44 | ||
| Altman-Z | 2.62 |
ROIC/WACC0.53
WACC8.53%
2.3 Liquidity
A Current Ratio of 1.14 indicates that BRK.B should not have too much problems paying its short term obligations.
BRK.B has a Current ratio (1.14) which is in line with its industry peers.
A Quick Ratio of 0.91 indicates that BRK.B may have some problems paying its short term obligations.
BRK.B has a Quick ratio of 0.91. This is comparable to the rest of the industry: BRK.B outperforms 45.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.14 | ||
| Quick Ratio | 0.91 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 13.77% 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 17.78% yearly.
BRK.B shows a small growth in Revenue. In the last year, the Revenue has grown by 0.63%.
BRK.B shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.84% yearly.
EPS 1Y (TTM)13.77%
EPS 3Y21.97%
EPS 5Y17.78%
EPS Q2Q%-14.02%
Revenue 1Y (TTM)0.63%
Revenue growth 3Y10.38%
Revenue growth 5Y7.84%
Sales Q2Q%-0.16%
3.2 Future
The Earnings Per Share is expected to grow by 2.27% on average over the next years.
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-5.7%
EPS Next 2Y-0.22%
EPS Next 3Y1.32%
EPS Next 5Y2.27%
Revenue Next Year4.56%
Revenue Next 2Y4.16%
Revenue Next 3Y0.25%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 23.94, the valuation of BRK.B can be described as rather expensive.
Based on the Price/Earnings ratio, BRK.B is valued a bit more expensive than the industry average as 66.00% of the companies are valued more cheaply.
The average S&P500 Price/Earnings ratio is at 26.35. BRK.B is around the same levels.
BRK.B is valuated rather expensively with a Price/Forward Earnings ratio of 23.25.
68.00% of the companies in the same industry are cheaper than BRK.B, based on the Price/Forward Earnings ratio.
BRK.B is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 22.20, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.94 | ||
| Fwd PE | 23.25 |
4.2 Price Multiples
BRK.B's Enterprise Value to EBITDA is on the same level as the industry average.
The rest of the industry has a similar Price/Free Cash Flow ratio as BRK.B.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 91.16 | ||
| EV/EBITDA | 16.25 |
4.3 Compensation for Growth
The decent profitability rating of BRK.B may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.35
EPS Next 2Y-0.22%
EPS Next 3Y1.32%
5. Dividend
5.1 Amount
No dividends for BRK.B!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
509.16
+5.7 (+1.13%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners33.43%
Inst Owner Change1.36%
Ins Owners37.69%
Ins Owner ChangeN/A
Market Cap1099.79B
Analysts80
Price Target535.36 (5.15%)
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)16.51%
Min EPS beat(2)-9.78%
Max EPS beat(2)42.8%
EPS beat(4)2
Avg EPS beat(4)10.96%
Min EPS beat(4)-10.41%
Max EPS beat(4)42.8%
EPS beat(8)6
Avg EPS beat(8)11.15%
EPS beat(12)8
Avg EPS beat(12)9.18%
EPS beat(16)11
Avg EPS beat(16)8.21%
Revenue beat(2)0
Avg Revenue beat(2)-2.05%
Min Revenue beat(2)-4.09%
Max Revenue beat(2)-0.01%
Revenue beat(4)0
Avg Revenue beat(4)-2.99%
Min Revenue beat(4)-7.69%
Max Revenue beat(4)-0.01%
Revenue beat(8)4
Avg Revenue beat(8)0.2%
Revenue beat(12)5
Avg Revenue beat(12)-0.61%
Revenue beat(16)6
Avg Revenue beat(16)-0.89%
PT rev (1m)1.13%
PT rev (3m)2.93%
EPS NQ rev (1m)-1.97%
EPS NQ rev (3m)5.69%
EPS NY rev (1m)-2.25%
EPS NY rev (3m)1.05%
Revenue NQ rev (1m)4.96%
Revenue NQ rev (3m)4.13%
Revenue NY rev (1m)4.55%
Revenue NY rev (3m)3.61%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.94 | ||
| Fwd PE | 23.25 | ||
| P/S | 2.96 | ||
| P/FCF | 91.16 | ||
| P/OCF | 35.56 | ||
| P/B | 1.68 | ||
| P/tB | 2.06 | ||
| EV/EBITDA | 16.25 |
EPS(TTM)21.27
EY4.18%
EPS(NY)21.9
Fwd EY4.3%
FCF(TTM)5.59
FCFY1.1%
OCF(TTM)14.32
OCFY2.81%
SpS171.89
BVpS303
TBVpS247.7
PEG (NY)N/A
PEG (5Y)1.35
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.95% | ||
| ROE | 12.36% | ||
| ROCE | 5.56% | ||
| ROIC | 4.5% | ||
| ROICexc | 4.68% | ||
| ROICexgc | 5.61% | ||
| OM | 15.89% | ||
| PM (TTM) | 21.79% | ||
| GM | 16.43% | ||
| FCFM | 3.25% |
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 | 10.44 | ||
| Debt/EBITDA | 1.75 | ||
| Cap/Depr | 145.65% | ||
| Cap/Sales | 5.08% | ||
| Interest Coverage | 11.99 | ||
| Cash Conversion | 42.99% | ||
| Profit Quality | 14.91% | ||
| Current Ratio | 1.14 | ||
| Quick Ratio | 0.91 | ||
| Altman-Z | 2.62 |
F-Score4
WACC8.53%
ROIC/WACC0.53
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)13.77%
EPS 3Y21.97%
EPS 5Y17.78%
EPS Q2Q%-14.02%
EPS Next Y-5.7%
EPS Next 2Y-0.22%
EPS Next 3Y1.32%
EPS Next 5Y2.27%
Revenue 1Y (TTM)0.63%
Revenue growth 3Y10.38%
Revenue growth 5Y7.84%
Sales Q2Q%-0.16%
Revenue Next Year4.56%
Revenue Next 2Y4.16%
Revenue Next 3Y0.25%
Revenue Next 5Y6.94%
EBIT growth 1Y12.44%
EBIT growth 3Y18.52%
EBIT growth 5Y13.14%
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-47.83%
FCF growth 3Y-23.7%
FCF growth 5Y-12.55%
OCF growth 1Y-21.13%
OCF growth 3Y-8.11%
OCF growth 5Y-4.59%