NYSE:BF.B

Stock Analysis Report

Executive Summary

Brown-Forman Corporation manufactures, bottles, imports, exports, markets, and sells various alcoholic beverages worldwide.

Snowflake

Fundamentals

Adequate balance sheet with proven track record and pays a dividend.


Similar Companies

Share Price & News

How has Brown-Forman's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

0.3%

BF.B

-1.5%

US Beverage

0.6%

US Market


1 Year Return

35.2%

BF.B

17.9%

US Beverage

6.2%

US Market

Return vs Industry: BF.B exceeded the US Beverage industry which returned 17.9% over the past year.

Return vs Market: BF.B exceeded the US Market which returned 6.2% over the past year.


Share holder returns

BF.BIndustryMarket
7 Day0.3%-1.5%0.6%
30 Day-3.4%-1.6%-1.8%
90 Day12.4%1.0%-2.0%
1 Year36.9%35.2%21.0%17.9%8.6%6.2%
3 Year84.0%73.6%32.8%22.6%45.7%36.3%
5 Year100.0%83.7%57.9%37.8%68.5%50.0%

Price Volatility Vs. Market

How volatile is Brown-Forman's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Brown-Forman undervalued based on future cash flows and its price relative to the stock market?

36.67x

Price to Earnings (PE) ratio


Intrinsic Value Based on Future Cash Flows

Undervalued: BF.B ($62.98) is trading above our estimate of fair value ($37.36)

Significantly Undervalued: BF.B is trading above our estimate of fair value.


Price Based on Earnings

PE vs Industry: BF.B is poor value based on its PE Ratio (36.7x) compared to the Beverage industry average (31.2x).

PE vs Market: BF.B is poor value based on its PE Ratio (36.7x) compared to the US market (17.5x).


Price Based on Expected Growth

Low PEG Ratio: BF.B is poor value based on its PEG Ratio (4.8x)


Price Based on Value of Assets

PB vs Industry: BF.B is overvalued based on its PB Ratio (18.1x) compared to the US Beverage industry average (5.1x).


Next Steps

Future Growth

How is Brown-Forman expected to perform in the next 1 to 3 years based on estimates from 15 analysts?

7.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Earnings vs Savings Rate: BF.B's forecast earnings growth (7.7% per year) is above the savings rate (2.7%).

Earnings vs Market: BF.B's earnings (7.7% per year) are forecast to grow slower than the US market (14.5% per year).

High Growth Earnings: BF.B's earnings are forecast to grow, but not significantly.

Revenue vs Market: BF.B's revenue (5.6% per year) is forecast to grow slower than the US market (7.3% per year).

High Growth Revenue: BF.B's revenue (5.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Estimates


Future Return on Equity

High Future ROE: BF.B's Return on Equity is forecast to be very high in 3 years time (43.7%).


Next Steps

Past Performance

How has Brown-Forman performed over the past 5 years?

2.0%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: BF.B's earnings have grown by 2% per year over the past 5 years.

Accelerating Growth: BF.B's earnings growth over the past year (11.1%) exceeds its 5-year average (2% per year).

Earnings vs Industry: BF.B earnings growth over the past year (11.1%) exceeded the Beverage industry -1.9%.


Return on Equity

High ROE: Whilst BF.B's Return on Equity (49.37%) is outstanding, this metric is skewed due to their high level of debt.


Return on Assets

ROA vs Industry: BF.B has a higher Return on Assets than the Beverage industry average last year.


Return on Capital Employed

ROCE Improving: BF.B's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is Brown-Forman's financial position?


Financial Position Analysis

Short Term Liabilities: BF.B's short term assets ($2.8B) exceeds its short term liabilities ($867.0M)

Long Term Liabilities: BF.B's short term assets ($2.8B) exceeds its long term liabilities ($2.8B)


Debt to Equity History and Analysis

Debt Level: BF.B's debt to equity ratio (149.5%) is considered high

Reducing Debt: BF.B's debt to equity ratio has increased from 49.3% to 149.5% over the past 5 years.

Debt Coverage: BF.B's debt is well covered by operating cash flow (30%).

Interest Coverage: BF.B's interest payments on its debt are well covered by EBIT (13.8x coverage).


Balance Sheet

Inventory Level: BF.B has a high level of physical assets or inventory.

Debt Coverage by Assets: BF.B's debt is covered by short term assets (assets are 1.140730x debt).


Next Steps

Dividend

What is Brown-Forman's current dividend yield, its reliability and sustainability?

1.20%

Expected Dividend Yield


Dividend Yield vs Market

company1.1%marketbottom25%1.5%markettop25%3.8%industryaverage2.5%forecastin3Years1.2%

Current dividend yield vs market & industry


Dividend Yield and Payments Analysis

Notable Dividend: BF.B's dividend (1.05%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.46%).

High Dividend: BF.B's dividend (1.05%) is low compared to the top 25% of dividend payers in the US market (3.77%).

Stable Dividend: BF.B's dividends per share have been stable in the past 10 years.

Growing Dividend: BF.B's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (38.2%), BF.B's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: BF.B's dividends in 3 years are forecast to be well covered by earnings (39% payout ratio).


Next Steps

Management

What is the CEO of Brown-Forman's salary, the management and board of directors tenure and is there insider trading?

5.7yrs

Average management tenure


CEO

Lawson Whiting (51yo)

0.8yrs

Tenure

US$3,695,893

Compensation

Mr. Lawson E. Whiting has been Chief Executive Officer of Brown-Forman Corporation since January 1, 2019 and its President since March 28, 2019 and served as its President from January 1, 2019 to February  ...


CEO Compensation Analysis

Compensation vs. Market: Lawson has recently become CEO, making it difficult to compare their total compensation against companies of similar size in the US market.

Compensation vs Earnings: Lawson's compensation has increased by more than 20% in the past year.


Management Age and Tenure

5.7yrs

Average Tenure

57yo

Average Age

Experienced Management: BF.B's management team is seasoned and experienced (5.7 years average tenure).


Board Age and Tenure

5.7yrs

Average Tenure

61yo

Average Age

Experienced Board: BF.B's board of directors are considered experienced (5.7 years average tenure).


Insider Trading

Insider Buying: BF.B insiders have sold more shares than they have bought in the past 3 months.


Recent Insider Transactions

BuyUS$40,54304 Sep 19
Matthew Hamel
EntityIndividual
Role
Chief Legal Officer
Executive VP
Shares685
Max PriceUS$59.19
SellUS$640,12404 Sep 19
Thomas Hinrichs
EntityIndividual
Role
Senior Key Executive
Senior Vice President of the International Division
Shares10,568
Max PriceUS$60.57
SellUS$100,02703 Jul 19
John Hayes
EntityIndividual
Shares1,770
Max PriceUS$56.51
SellUS$7,72227 Dec 18
Michael Keyes
EntityIndividual
Shares167
Max PriceUS$46.24

Ownership Breakdown


Management Team

  • Mark McCallum (64yo)

    Executive VP & Chief Brands Officer

    • Tenure: 16.3yrs
    • Compensation: US$2.58m
  • Jane Morreau (60yo)

    Executive VP & CFO

    • Tenure: 5.7yrs
    • Compensation: US$3.07m
  • Matt Hamel (59yo)

    Executive VP

    • Tenure: 12yrs
    • Compensation: US$1.86m
  • Marshall Farrer (48yo)

    Senior VP

    • Tenure: 3.4yrs
  • Ralph de Chabert (72yo)

    Senior VP and Chief Diversity Inclusion & Global Community Relations Officer

    • Tenure: 11.8yrs
  • Jim O'Malley

    Senior Vice President of Global Government Relations

    • Tenure: 0yrs
  • Lawson Whiting (51yo)

    CEO, President & Director

    • Tenure: 0.8yrs
    • Compensation: US$3.70m
  • Kirsten Hawley (49yo)

    Senior VP

    • Tenure: 0.6yrs
  • Thomas Hinrichs (57yo)

    Senior Vice President of the International Division

    • Tenure: 1.3yrs
    • Compensation: US$1.47m
  • Kelli Nelson (49yo)

    Senior VP & Chief Accounting Officer

    • Tenure: 1.2yrs

Board Members

  • Bruce Byrnes (70yo)

    Independent Director

    • Tenure: 9.1yrs
    • Compensation: US$230.00k
  • Patrick Bousquet-Chavanne (61yo)

    Independent Director

    • Tenure: 14.4yrs
    • Compensation: US$290.32k
  • Mike Roney (65yo)

    Independent Director

    • Tenure: 5.6yrs
    • Compensation: US$228.00k
  • Michael Todman (61yo)

    Independent Director

    • Tenure: 5.8yrs
    • Compensation: US$230.00k
  • Geo Brown (50yo)

    Chairman of the Board

    • Tenure: 13.4yrs
    • Compensation: US$863.00k
  • Marshall Farrer (48yo)

    Senior VP

    • Tenure: 3.4yrs
  • Laura Frazier (61yo)

    Director

    • Tenure: 3.4yrs
    • Compensation: US$200.00k
  • Campbell Brown (51yo)

    Senior VP

    • Tenure: 3.4yrs
  • John Cook (66yo)

    Lead Independent Director

    • Tenure: 7.1yrs
    • Compensation: US$257.50k
  • Lawson Whiting (51yo)

    CEO, President & Director

    • Tenure: 0.8yrs
    • Compensation: US$3.70m

Company Information

Brown-Forman Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Brown-Forman Corporation
  • Ticker: BF.B
  • Exchange: NYSE
  • Founded: 1870
  • Industry: Distillers and Vintners
  • Sector: Food, Beverage & Tobacco
  • Market Cap: US$29.614b
  • Shares outstanding: 477.54m
  • Website: https://www.brown-forman.com

Number of Employees


Location

  • Brown-Forman Corporation
  • 850 Dixie Highway
  • Louisville
  • Kentucky
  • 40210
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
BF.ANYSE (New York Stock Exchange)Class A Common SharesUSUSDJan 1968
BF.BNYSE (New York Stock Exchange)YesClass B Common SharesUSUSDJan 1968
BF5BDB (Deutsche Boerse AG)YesClass B Common SharesDEEURJan 1968
0HQ3LSE (London Stock Exchange)YesClass B Common SharesGBUSDJan 1968

Biography

Brown-Forman Corporation manufactures, bottles, imports, exports, markets, and sells various alcoholic beverages worldwide. It provides spirits, wines, whiskey spirits, whiskey-based flavored liqueurs, rea ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/12 23:38
End of Day Share Price2019/10/11 00:00
Earnings2019/07/31
Annual Earnings2019/04/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.

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