Brady Corporation (BRC) has a Price to Cash Flow ratio of 16.783836, and a current Price to Earnings ratio of 19.70263
The price-to-cash flow ratio measures the current price of the company’s stock relative to the amount of cash generated by the company. The price-to-cash flow multiple is primarily used in the comparable analysis method of stock valuation.
Individual investors often have a lot to deal with when surveying the stock market landscape. Choosing stocks based on recent performance may not work out as well as planned. Stocks that were winners last year, last month, or even last week, may not be winners next week, next month, or next year. Digging into the fundamentals can help the investor see what stocks are set up for future success. Taking multiple approaches when viewing a certain security may help the investor put the puzzle together and see the bigger picture. Staying current on economic data can also help the investor obtain a broader sense of what is driving present market conditions.
The Shareholder Yield is a way that investors can see how much money shareholders are receiving from a company through a combination of dividends, share repurchases and debt reduction. The Shareholder Yield of Brady Corporation (BRC) is -0.003157. This percentage is calculated by adding the dividend yield plus the percentage of shares repurchased. Dividends are a common way that companies distribute cash to their shareholders. Similarly, cash repurchases and a reduction of debt can increase the shareholder value, too.
Benjamin Graham, professor and founder of value investing principles, was one of the first to consistently screen the market looking for bargain companies based on value factors. He didn’t have databases such as ValueSignals at his disposal, but used people like his apprentice Warren Buffet to fill out stock sheets with the most important data.
Graham was always on the watch for firms that were so discounted, that if the company went into liquidation, the proceeds of the assets would still return a profit.
The ratio he used to identify these companies was Net Current Asset Value or NCAV. This ratio is much more stringent compared to book value (total assets – total liabilities) and is calculated as follows:
NCAV = Current Assets – Total Liabilities
Current Assets = Cash & ST Investments + Inventories + Accounts Receivable
This strategy was very successful during the years after Graham published it in his book ‘Security analysis’ in 1934 and also in more recent studies it has proven to provide superior results. A study done by the State University of New York to prove the effectiveness of this strategy showed that from the period of 1970 to 1983 an investor could have earned an average return of 29.4%, by purchasing stocks that fulfilled Graham’s requirement and holding them for one year. Nowadays it’s very difficult to find companies that meet Graham’s criteria. Brady Corporation (BRC) has an NCAV to Market value of 0.09797.
Return on Assets
There are many different tools to determine whether a company is profitable or not. One of the most popular ratios is the “Return on Assets” (aka ROA). This score indicates how profitable a company is relative to its total assets. The Return on Assets for Brady Corporation (BRC) is 0.125407. This number is calculated by dividing net income after tax by the company’s total assets. A company that manages their assets well will have a higher return, while a company that manages their assets poorly will have a lower return.
The M-Score, conceived by accounting professor Messod Beneish, is a model for detecting whether a company has manipulated their earnings numbers or not. Brady Corporation (BRC) has an M-Score of -2.529498. The M-Score is based on 8 different variables: Days’ sales in receivables index, Gross Margin Index, Asset Quality Index, Sales Growth Index, Depreciation Index, Sales, General and Administrative expenses Index, Leverage Index and Total Accruals to Total Assets. A score higher than -1.78 is an indicator that the company might be manipulating their numbers.
The Return on Invested Capital (aka ROIC) for Brady Corporation (BRC) is 0.354944. The Return on Invested Capital is a ratio that determines whether a company is profitable or not. It tells investors how well a company is turning their capital into profits. The ROIC is calculated by dividing the net operating profit (or EBIT) by the employed capital. The employed capital is calculated by subrating current liabilities from total assets. Similarly, the Return on Invested Capital Quality ratio is a tool in evaluating the quality of a company’s ROIC over the course of five years. The ROIC 5 year average is calculated using the five year average EBIT, five year average (net working capital and net fixed assets). The ROIC 5 year average of Brady Corporation (BRC) is 0.391802.
When conducting stock analysis, investors have a wide array of various classifications to choose from. Growth stocks generally have the potential to produce above average profit growth and revenues. These types of stocks tend to expand quicker than the economy as a whole. Investors also have the option of adding cyclical stocks to the portfolio. Cyclicals are generally companies whose earnings and sales are highly correlated with that of the overall economy. When the economy is doing well, cyclical stocks may be more in favor. Investors may decide to go in another direction when the economy is dragging. When an economic downturn is underway, investors may choose to select defensive stocks. These types of stocks generally stand up well during down periods based on their insulation from the business cycle. Investors also have the option of purchasing foreign stocks to help add some diversity to the portfolio.