NYSE:BF.B

Stock Analysis Report

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Executive Summary

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


Snowflake Analysis

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

Stable Share Price: BF.B has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-3.9%

BF.B

-1.6%

US Beverage

-1.3%

US Market


1 Year Return

15.1%

BF.B

0.3%

US Beverage

18.5%

US Market

Return vs Industry: BF.B exceeded the US Beverage industry which returned 0.3% over the past year.

Return vs Market: BF.B underperformed the US Market which returned 18.5% over the past year.


Shareholder returns

BF.BIndustryMarket
7 Day-3.9%-1.6%-1.3%
30 Day-1.8%3.3%5.3%
90 Day8.8%3.8%7.5%
1 Year16.3%15.1%3.0%0.3%21.3%18.5%
3 Year76.5%67.2%24.1%14.5%42.4%32.9%
5 Year87.9%73.1%44.6%26.6%84.2%63.5%

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 compared to its fair value and its price relative to the market?

36.89x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: BF.B ($74.47) is trading above our estimate of fair value ($47.27)

Significantly Below Fair Value: BF.B is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: BF.B is poor value based on its PE Ratio (36.9x) compared to the US Beverage industry average (31.8x).

PE vs Market: BF.B is poor value based on its PE Ratio (36.9x) compared to the US market (19x).


Price to Earnings Growth Ratio

PEG Ratio: BF.B is poor value based on its PEG Ratio (5.7x)


Price to Book Ratio

PB vs Industry: BF.B is overvalued based on its PB Ratio (16.6x) compared to the US Beverage industry average (4.8x).


Next Steps

Future Growth

How is Brown-Forman forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

6.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: BF.B's forecast earnings growth (6.5% per year) is above the savings rate (2.2%).

Earnings vs Market: BF.B's earnings (6.5% per year) are forecast to grow slower than the US market (22.2% per year).

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

Revenue vs Market: BF.B's revenue (5.5% per year) is forecast to grow slower than the US market (10.1% per year).

High Growth Revenue: BF.B's revenue (5.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: BF.B's Return on Equity is forecast to be high in 3 years time (34.9%)


Next Steps

Past Performance

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

0.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: BF.B has high quality earnings.

Growing Profit Margin: BF.B's current net profit margins (28.8%) are higher than last year (24.7%).


Past Earnings Growth Analysis

Earnings Trend: BF.B's earnings have grown by 0.4% per year over the past 5 years.

Accelerating Growth: BF.B's earnings growth over the past year (17.5%) exceeds its 5-year average (0.4% per year).

Earnings vs Industry: BF.B earnings growth over the past year (17.5%) underperformed the Beverage industry 17.5%.


Return on Equity

High ROE: Whilst BF.B's Return on Equity (44.88%) is outstanding, this metric is skewed due to their high level of debt.


Next Steps

Financial Health

How is Brown-Forman's financial position?


Financial Position Analysis

Short Term Liabilities: BF.B's short term assets ($3.6B) exceed its short term liabilities ($1.1B).

Long Term Liabilities: BF.B's short term assets ($3.6B) exceed its long term liabilities ($3.0B).


Debt to Equity History and Analysis

Debt Level: BF.B's debt to equity ratio (123.3%) is considered high.

Reducing Debt: BF.B's debt to equity ratio has increased from 88.1% to 123.3% over the past 5 years.

Debt Coverage: BF.B's debt is well covered by operating cash flow (28%).

Interest Coverage: BF.B's interest payments on its debt are well covered by EBIT (14.3x coverage).


Balance Sheet


Next Steps

Dividend

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

0.94%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: BF.B's dividend (0.94%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.64%).

High Dividend: BF.B's dividend (0.94%) is low compared to the top 25% of dividend payers in the US market (4.68%).


Stability and Growth of Payments

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 (34.1%), 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 (37.6% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.3yrs

Average management tenure


CEO

Lawson Whiting (52 yo)

1.75yrs

Tenure

US$6,196,407

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's total compensation ($USD6.20M) is below average for companies of similar size in the US market ($USD11.20M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Lawson Whiting
CEO, President & Director1.75yrsUS$6.20m0.0031%
$ 1.1m
Jane Morreau
Executive VP & CFO6.67yrsUS$3.25m0.012%
$ 4.0m
Matthew Hamel
Executive VP13yrsUS$1.87m0.034%
$ 11.9m
John Hayes
Senior VP and President of USA & Canada2.33yrsUS$1.70m0.015%
$ 5.3m
Thomas Hinrichs
Senior VP & President of Emerging International2.33yrsUS$1.36m0.0012%
$ 403.2k
Kelli Brown
Senior VP & Chief Accounting Officer2.17yrsno data0.00040%
$ 137.8k
Steve Cassin
Investor Relations Managerno datano datano data
Kirsten Hawley
Senior VP1.58yrsno data0.0038%
$ 1.3m
Marshall Farrer
Senior VP4.42yrsno data0.0033%
$ 1.1m
Ralph de Chabert
Senior VP and Chief Diversity Inclusion & Global Community Relations Officer12.83yrsno data0.0015%
$ 527.3k
James O'Malley
Executive Officer0.17yrno datano data
Campbell Brown
Senior VP4.42yrsno data1.62%
$ 557.6m

2.3yrs

Average Tenure

55yo

Average Age

Experienced Management: BF.B's management team is considered experienced (2.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Lawson Whiting
CEO, President & Director1.75yrsUS$6.20m0.0031%
$ 1.1m
Marshall Farrer
Senior VP4.42yrsno data0.0033%
$ 1.1m
Campbell Brown
Senior VP4.42yrsno data1.62%
$ 557.6m
Patrick Bousquet-Chavanne
Independent Director15.42yrsUS$251.25k0.013%
$ 4.4m
Michael Roney
Independent Director6.58yrsUS$277.50kno data
Michael Todman
Independent Director6.75yrsUS$255.00kno data
George Brown
Chairman of the Board13.08yrsUS$865.00k1.17%
$ 401.8m
Laura Frazier
Director4.42yrsUS$205.00k0.23%
$ 78.4m
John Cook
Lead Independent Director8.08yrsUS$343.75k0.0065%
$ 2.2m
Kathleen Gutmann
Independent Director3.42yrsUS$230.00kno data
Augusta Holland
Director5.42yrsUS$199.34k0.42%
$ 143.0m
Stuart Brown
Director5.42yrsUS$213.75k0.41%
$ 139.8m

5.4yrs

Average Tenure

53.5yo

Average Age

Experienced Board: BF.B's board of directors are considered experienced (5.4 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

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


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

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$34.462b
  • Shares outstanding: 478.45m
  • 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
BF5ADB (Deutsche Boerse AG)Class A Common SharesDEEURJan 1968
B1FC34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 1 REPR 1 COMBRBRLJan 2020

Biography

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


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/10/21 00:22
End of Day Share Price2020/10/20 00:00
Earnings2020/07/31
Annual Earnings2020/04/30


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.