Analyzing Brown Forman (BF.B) & Brown-Forman (BF.A)

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

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Brown-Forman and Brown Forman, as provided by MarketBeat.

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 price target of $51.89, suggesting a potential downside of 21.20%. Given Brown Forman’s higher probable upside, analysts plainly believe Brown Forman is more favorable than Brown-Forman.

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 0.95, suggesting that its stock price is 5% less volatile than the S&P 500.

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%

Insider and Institutional Ownership

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

Dividends

Brown-Forman pays an annual dividend of $0.73 per share and has a dividend yield of 1.1%. Brown Forman pays an annual dividend of $0.73 per share and has a dividend yield of 1.1%. Brown-Forman pays out 40.6% of its earnings in the form of a dividend. Brown Forman pays out 40.3% 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.

Earnings and Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Brown-Forman $3.86 billion 6.52 $669.00 million $1.80 36.36
Brown Forman $3.86 billion 6.56 $669.00 million $1.81 36.38

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.

Summary

Brown Forman beats Brown-Forman on 7 of the 10 factors compared between the two stocks.

About Brown-Forman

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.

About Brown Forman

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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