Brown Forman (NYSE: BF.B) and Brown-Forman (NYSE:BF.A) are both large-cap non-cyclical consumer goods & services companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, analyst recommendations, risk, dividends and valuation.

Institutional & Insider Ownership

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

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%

Analyst Ratings

This is a summary of current ratings and target prices for Brown Forman and Brown-Forman, as reported by MarketBeat.

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

Brown Forman presently has a consensus target price of $51.89, suggesting a potential downside of 16.43%. Given Brown Forman’s higher possible upside, equities research analysts plainly believe Brown Forman is more favorable than Brown-Forman.

Valuation and 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 6.19 $669.00 million $1.81 34.30
Brown-Forman $3.86 billion 6.23 $669.00 million $1.80 34.76

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.

Risk & Volatility

Brown Forman has a beta of 0.95, meaning that its stock price is 5% less volatile than the S&P 500. Comparatively, Brown-Forman has a beta of 0.98, meaning that its stock price is 2% less volatile than the S&P 500.

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 40.3% 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. Brown Forman is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Brown Forman beats Brown-Forman on 7 of the 10 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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