Brown Forman (BF.A & BF.B)

Key Statistics

EV/EBIT = 26.37x

ROE = 29.72%

Debt/Equity = 79%

FCF Yield = 2.32%

Dividend Yield = 1.24%

Market Cap = $31.87 billion

The Company

Brown-Forman (BF) is a Kentucky-based spirits company founded in 1870 by George Garvin Brown. Their signature product is Jack Daniel's whiskey, the world's top selling American whiskey.

George Garvin Brown began to sell "Old Forester Whiskey" in a sealed glass bottle to ensure quality. It was known as a premium brand due to this. In 1890, he partnered with George Forman, resulting in the company's Brown-Forman name. After the founders' deaths, the Brown family took control of the company, which continues to this day.

The company faced its most significant challenge with the onset of prohibition. During prohibition, whiskey was still used for medicinal purposes even though it was illegal for recreational consumption. Brown Forman ensured its survival by obtaining a special license from the government to sell whiskey for medicinal purposes.

In 1956, Brown Forman achieved its most significant acquisition: Jack Daniels Distillery.

Jack Daniels is one of the most iconic all-American brands in the world. It is associated with rock stars like Slash, Keith Richards, Eddie Van Halen, Nikki Sixx, and Jimmy Page. It was also Frank Sinatra’s preferred spirit. Jack Daniels is perceived globally as a premium example of Americana.

Sinatra played a crucial part in the popularity of Jack Daniels after World War II. He first tried it in 1947 upon the urging of Jackie Gleason. Sinatra immediately fell in love with the Jack Daniels flavor and had cases of it packed for his trips throughout the world to make sure that he always had a fresh supply. Sinatra publicly referred to it as the ‘nectar of the gods,’ and it exploded in popularity. Sinatra loved the product so much that he was buried with a bottle of Jack Daniels.