Financial Analysis: Brown-Forman (BF.A) versus Brown Forman (BF.B)

Brown-Forman (NYSE: BF.A) and Brown Forman (NYSE:BF.B) are both large-cap consumer staples companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, analyst recommendations, institutional ownership and earnings.

Insider and Institutional Ownership

6.7% of Brown-Forman shares are held by institutional investors. Comparatively, 24.7% of Brown Forman shares are held by institutional investors. 4.4% of Brown-Forman shares are held by company insiders. Comparatively, 10.1% of Brown Forman shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

Brown-Forman pays an annual dividend of $0.73 per share and has a dividend yield of 1.2%. Brown Forman pays an annual dividend of $0.73 per share and has a dividend yield of 1.2%. Brown-Forman pays out 40.6% of its earnings in the form of a dividend. Brown Forman pays out 40.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Analyst Ratings

This is a summary of recent recommendations and price targets for Brown-Forman and Brown Forman, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Brown-Forman 0 0 0 0 N/A
Brown Forman 1 9 1 0 2.00

Brown Forman has a consensus target price of $51.89, suggesting a potential downside of 14.52%. Given Brown Forman’s higher probable upside, analysts plainly believe Brown Forman is more favorable than Brown-Forman.

Profitability

This table compares Brown-Forman and Brown Forman’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Brown-Forman 17.84% 53.63% 15.04%
Brown Forman 17.84% 53.63% 15.04%

Valuation & Earnings

This table compares Brown-Forman and Brown Forman’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Brown-Forman $3.86 billion 6.08 $669.00 million $1.80 33.93
Brown Forman $3.86 billion 6.05 $669.00 million $1.80 33.72

Brown Forman is trading at a lower price-to-earnings ratio than Brown-Forman, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Brown-Forman has a beta of 0.98, suggesting that its stock price is 2% less volatile than the S&P 500. Comparatively, Brown Forman has a beta of 0.96, suggesting that its stock price is 4% less volatile than the S&P 500.

Summary

Brown Forman beats Brown-Forman on 5 of the 8 factors compared between the two stocks.

Brown-Forman Company Profile

Brown-Forman Corporation is a spirit and wine company. The Company manufactures, bottles, imports, exports, markets and sells a range of alcoholic beverages. The Company has a portfolio of approximately 40 spirit, wine and ready-to-drink cocktail (RTD) brands. Its principal brands include Jack Daniel’s Tennessee Whiskey, Jack Daniel’s RTDs, Jack Daniel’s Tennessee Honey, Gentleman Jack Rare Tennessee Whiskey, Jack Daniel’s Tennessee Fire, Jack Daniel’s Single Barrel Collection, Jack Daniel’s Sinatra Select, Jack Daniel’s Winter Jack, Jack Daniel’s No. 27 Gold Tennessee Whiskey, Finlandia Vodkas, Finlandia RTDs, Korbel California Brandy, Woodford Reserve Kentucky Bourbons, el Jimador Tequilas, el Jimador New Mix RTDs, Herradura Tequilas, Canadian Mist Canadian Whisky, Sonoma-Cutrer California Wines, Early Times Kentucky Whisky and Bourbon, Chambord Liqueur, Old Forester Kentucky Bourbon, Antiguo Tequila, Pepe Lopez Tequila, Santa Dose Cachaca and Collingwood Canadian Whisky.

Brown Forman Company Profile

Brown-Forman Corporation is a spirit and wine company. The Company manufactures, bottles, imports, exports, markets and sells a range of alcoholic beverages. The Company has a portfolio of approximately 40 spirit, wine and ready-to-drink cocktail (RTD) brands. Its principal brands include Jack Daniel’s Tennessee Whiskey, Jack Daniel’s RTDs, Jack Daniel’s Tennessee Honey, Gentleman Jack Rare Tennessee Whiskey, Jack Daniel’s Tennessee Fire, Jack Daniel’s Single Barrel Collection, Jack Daniel’s Sinatra Select, Jack Daniel’s Winter Jack, Jack Daniel’s No. 27 Gold Tennessee Whiskey, Finlandia Vodkas, Finlandia RTDs, Korbel California Brandy, Woodford Reserve Kentucky Bourbons, el Jimador Tequilas, el Jimador New Mix RTDs, Herradura Tequilas, Canadian Mist Canadian Whisky, Sonoma-Cutrer California Wines, Early Times Kentucky Whisky and Bourbon, Chambord Liqueur, Old Forester Kentucky Bourbon, Antiguo Tequila, Pepe Lopez Tequila, Santa Dose Cachaca and Collingwood Canadian Whisky.

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