Intrinsic value of B&G Foods - BGS

Previous Close

$37.15

  Intrinsic Value

premium content

  Rating & Target

premium content

  Value-price divergence*

premium content

Previous close

$37.15

 
Intrinsic value premium content
 
Up/down potential premium content
 
Rating premium content
 
Value-price divergence* premium content

Premium access subscription - $499/yr

please register and log in before paying

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of BGS stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 2.4

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  44.00
  44.00
  40.10
  36.59
  33.43
  30.59
  28.03
  25.73
  23.65
  21.79
  20.11
  18.60
  17.24
  16.01
  14.91
  13.92
  13.03
  12.23
  11.50
  10.85
  10.27
  9.74
  9.27
  8.84
  8.46
  8.11
  7.80
  7.52
  7.27
  7.04
  6.84
Revenue, $m
  1,391
  2,003
  2,806
  3,833
  5,115
  6,679
  8,551
  10,751
  13,294
  16,190
  19,446
  23,063
  27,038
  31,368
  36,046
  41,065
  46,416
  52,091
  58,083
  64,387
  70,999
  77,915
  85,136
  92,662
  100,498
  108,650
  117,124
  125,932
  135,084
  144,596
  154,482
Variable operating expenses, $m
 
  1,603
  2,222
  3,012
  3,999
  5,203
  6,644
  8,338
  10,296
  12,526
  15,032
  17,755
  20,816
  24,149
  27,751
  31,614
  35,733
  40,102
  44,716
  49,569
  54,659
  59,984
  65,543
  71,337
  77,370
  83,645
  90,169
  96,950
  103,996
  111,318
  118,929
Fixed operating expenses, $m
 
  8
  8
  9
  9
  9
  9
  10
  10
  10
  10
  10
  11
  11
  11
  12
  12
  12
  12
  13
  13
  13
  14
  14
  14
  15
  15
  16
  16
  16
  17
Total operating expenses, $m
  1,140
  1,611
  2,230
  3,021
  4,008
  5,212
  6,653
  8,348
  10,306
  12,536
  15,042
  17,765
  20,827
  24,160
  27,762
  31,626
  35,745
  40,114
  44,728
  49,582
  54,672
  59,997
  65,557
  71,351
  77,384
  83,660
  90,184
  96,966
  104,012
  111,334
  118,946
Operating income, $m
  251
  391
  576
  812
  1,107
  1,467
  1,897
  2,403
  2,988
  3,655
  4,404
  5,297
  6,212
  7,208
  8,284
  9,439
  10,670
  11,976
  13,355
  14,805
  16,327
  17,918
  19,579
  21,311
  23,114
  24,990
  26,940
  28,966
  31,072
  33,261
  35,536
EBITDA, $m
  288
  530
  746
  1,022
  1,366
  1,787
  2,290
  2,881
  3,565
  4,344
  5,219
  6,191
  7,260
  8,424
  9,682
  11,031
  12,470
  13,995
  15,607
  17,301
  19,079
  20,939
  22,880
  24,904
  27,010
  29,202
  31,480
  33,848
  36,309
  38,866
  41,524
Interest expense (income), $m
  70
  60
  95
  140
  198
  271
  359
  465
  589
  733
  897
  1,081
  1,286
  1,511
  1,756
  2,020
  2,304
  2,607
  2,928
  3,267
  3,623
  3,997
  4,388
  4,797
  5,223
  5,666
  6,127
  6,606
  7,104
  7,622
  8,160
Earnings before tax, $m
  177
  331
  481
  672
  909
  1,196
  1,538
  1,938
  2,399
  2,921
  3,507
  4,216
  4,926
  5,697
  6,529
  7,419
  8,366
  9,369
  10,427
  11,539
  12,703
  13,921
  15,191
  16,514
  17,892
  19,324
  20,813
  22,360
  23,968
  25,639
  27,376
Tax expense, $m
  68
  89
  130
  181
  245
  323
  415
  523
  648
  789
  947
  1,138
  1,330
  1,538
  1,763
  2,003
  2,259
  2,530
  2,815
  3,115
  3,430
  3,759
  4,102
  4,459
  4,831
  5,218
  5,620
  6,037
  6,471
  6,923
  7,391
Net income, $m
  109
  242
  351
  491
  663
  873
  1,123
  1,415
  1,751
  2,133
  2,560
  3,078
  3,596
  4,159
  4,766
  5,416
  6,107
  6,840
  7,612
  8,423
  9,273
  10,162
  11,089
  12,056
  13,061
  14,107
  15,194
  16,323
  17,497
  18,716
  19,984

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  29
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  3,044
  4,345
  6,087
  8,315
  11,094
  14,488
  18,549
  23,321
  28,837
  35,120
  42,182
  50,027
  58,651
  68,044
  78,192
  89,078
  100,684
  112,995
  125,994
  139,669
  154,011
  169,013
  184,677
  201,003
  218,001
  235,683
  254,066
  273,171
  293,024
  313,657
  335,101
Adjusted assets (=assets-cash), $m
  3,015
  4,345
  6,087
  8,315
  11,094
  14,488
  18,549
  23,321
  28,837
  35,120
  42,182
  50,027
  58,651
  68,044
  78,192
  89,078
  100,684
  112,995
  125,994
  139,669
  154,011
  169,013
  184,677
  201,003
  218,001
  235,683
  254,066
  273,171
  293,024
  313,657
  335,101
Revenue / Adjusted assets
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
Average production assets, $m
  1,741
  2,330
  3,264
  4,458
  5,948
  7,768
  9,945
  12,503
  15,461
  18,829
  22,616
  26,822
  31,446
  36,481
  41,922
  47,758
  53,981
  60,581
  67,551
  74,883
  82,572
  90,615
  99,013
  107,766
  116,880
  126,360
  136,215
  146,459
  157,103
  168,165
  179,662
Working capital, $m
  344
  469
  657
  897
  1,197
  1,563
  2,001
  2,516
  3,111
  3,789
  4,550
  5,397
  6,327
  7,340
  8,435
  9,609
  10,861
  12,189
  13,591
  15,067
  16,614
  18,232
  19,922
  21,683
  23,517
  25,424
  27,407
  29,468
  31,610
  33,835
  36,149
Total debt, $m
  1,726
  2,705
  4,003
  5,662
  7,733
  10,261
  13,287
  16,842
  20,951
  25,632
  30,894
  36,738
  43,163
  50,161
  57,721
  65,831
  74,478
  83,649
  93,333
  103,521
  114,206
  125,383
  137,052
  149,215
  161,879
  175,052
  188,747
  202,980
  217,771
  233,142
  249,118
Total liabilities, $m
  2,258
  3,237
  4,535
  6,194
  8,265
  10,793
  13,819
  17,374
  21,483
  26,164
  31,426
  37,270
  43,695
  50,693
  58,253
  66,363
  75,010
  84,181
  93,865
  104,053
  114,738
  125,915
  137,584
  149,747
  162,411
  175,584
  189,279
  203,512
  218,303
  233,674
  249,650
Total equity, $m
  786
  1,108
  1,552
  2,120
  2,829
  3,694
  4,730
  5,947
  7,353
  8,956
  10,756
  12,757
  14,956
  17,351
  19,939
  22,715
  25,675
  28,814
  32,128
  35,616
  39,273
  43,098
  47,093
  51,256
  55,590
  60,099
  64,787
  69,659
  74,721
  79,982
  85,451
Total liabilities and equity, $m
  3,044
  4,345
  6,087
  8,314
  11,094
  14,487
  18,549
  23,321
  28,836
  35,120
  42,182
  50,027
  58,651
  68,044
  78,192
  89,078
  100,685
  112,995
  125,993
  139,669
  154,011
  169,013
  184,677
  201,003
  218,001
  235,683
  254,066
  273,171
  293,024
  313,656
  335,101
Debt-to-equity ratio
  2.196
  2.440
  2.580
  2.670
  2.730
  2.780
  2.810
  2.830
  2.850
  2.860
  2.870
  2.880
  2.890
  2.890
  2.890
  2.900
  2.900
  2.900
  2.910
  2.910
  2.910
  2.910
  2.910
  2.910
  2.910
  2.910
  2.910
  2.910
  2.910
  2.910
  2.920
Adjusted equity ratio
  0.251
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  109
  242
  351
  491
  663
  873
  1,123
  1,415
  1,751
  2,133
  2,560
  3,078
  3,596
  4,159
  4,766
  5,416
  6,107
  6,840
  7,612
  8,423
  9,273
  10,162
  11,089
  12,056
  13,061
  14,107
  15,194
  16,323
  17,497
  18,716
  19,984
Depreciation, amort., depletion, $m
  37
  139
  170
  210
  260
  320
  393
  478
  577
  689
  815
  894
  1,048
  1,216
  1,397
  1,592
  1,799
  2,019
  2,252
  2,496
  2,752
  3,021
  3,300
  3,592
  3,896
  4,212
  4,541
  4,882
  5,237
  5,605
  5,989
Funds from operations, $m
  357
  381
  522
  701
  923
  1,193
  1,516
  1,893
  2,328
  2,822
  3,375
  3,972
  4,644
  5,375
  6,163
  7,008
  7,907
  8,859
  9,863
  10,919
  12,026
  13,183
  14,390
  15,648
  16,957
  18,319
  19,734
  21,205
  22,734
  24,322
  25,973
Change in working capital, $m
  67
  143
  188
  240
  300
  366
  438
  515
  595
  678
  762
  846
  930
  1,013
  1,095
  1,174
  1,252
  1,328
  1,402
  1,475
  1,547
  1,618
  1,690
  1,761
  1,834
  1,907
  1,983
  2,061
  2,142
  2,226
  2,313
Cash from operations, $m
  290
  249
  334
  460
  623
  827
  1,078
  1,378
  1,733
  2,144
  2,613
  3,125
  3,714
  4,362
  5,069
  5,833
  6,655
  7,531
  8,461
  9,444
  10,479
  11,564
  12,700
  13,887
  15,123
  16,411
  17,751
  19,144
  20,592
  22,096
  23,660
Maintenance CAPEX, $m
  0
  -54
  -78
  -109
  -149
  -198
  -259
  -331
  -417
  -515
  -628
  -754
  -894
  -1,048
  -1,216
  -1,397
  -1,592
  -1,799
  -2,019
  -2,252
  -2,496
  -2,752
  -3,021
  -3,300
  -3,592
  -3,896
  -4,212
  -4,541
  -4,882
  -5,237
  -5,605
New CAPEX, $m
  -42
  -712
  -934
  -1,194
  -1,490
  -1,819
  -2,177
  -2,558
  -2,957
  -3,369
  -3,786
  -4,206
  -4,624
  -5,036
  -5,441
  -5,836
  -6,223
  -6,600
  -6,969
  -7,332
  -7,689
  -8,044
  -8,398
  -8,753
  -9,113
  -9,480
  -9,856
  -10,243
  -10,644
  -11,062
  -11,497
Cash from investing activities, $m
  -481
  -766
  -1,012
  -1,303
  -1,639
  -2,017
  -2,436
  -2,889
  -3,374
  -3,884
  -4,414
  -4,960
  -5,518
  -6,084
  -6,657
  -7,233
  -7,815
  -8,399
  -8,988
  -9,584
  -10,185
  -10,796
  -11,419
  -12,053
  -12,705
  -13,376
  -14,068
  -14,784
  -15,526
  -16,299
  -17,102
Free cash flow, $m
  -191
  -517
  -678
  -843
  -1,016
  -1,190
  -1,358
  -1,512
  -1,641
  -1,740
  -1,801
  -1,835
  -1,804
  -1,722
  -1,588
  -1,400
  -1,160
  -869
  -527
  -139
  294
  768
  1,282
  1,833
  2,418
  3,035
  3,683
  4,360
  5,065
  5,798
  6,557
Issuance/(repayment) of debt, $m
  -14
  990
  1,298
  1,659
  2,071
  2,528
  3,025
  3,555
  4,110
  4,681
  5,261
  5,845
  6,425
  6,998
  7,560
  8,110
  8,647
  9,171
  9,684
  10,188
  10,685
  11,177
  11,669
  12,163
  12,663
  13,173
  13,695
  14,233
  14,791
  15,371
  15,976
Issuance/(repurchase) of shares, $m
  332
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  317
  990
  1,298
  1,659
  2,071
  2,528
  3,025
  3,555
  4,110
  4,681
  5,261
  5,845
  6,425
  6,998
  7,560
  8,110
  8,647
  9,171
  9,684
  10,188
  10,685
  11,177
  11,669
  12,163
  12,663
  13,173
  13,695
  14,233
  14,791
  15,371
  15,976
Total cash flow (excl. dividends), $m
  125
  473
  620
  817
  1,055
  1,338
  1,667
  2,043
  2,468
  2,941
  3,461
  4,010
  4,621
  5,275
  5,972
  6,710
  7,487
  8,303
  9,157
  10,049
  10,978
  11,945
  12,951
  13,996
  15,081
  16,208
  17,378
  18,594
  19,856
  21,169
  22,533
Retained Cash Flow (-), $m
  -328
  -340
  -444
  -568
  -709
  -865
  -1,036
  -1,217
  -1,407
  -1,602
  -1,801
  -2,001
  -2,199
  -2,395
  -2,588
  -2,776
  -2,960
  -3,139
  -3,315
  -3,487
  -3,657
  -3,826
  -3,994
  -4,163
  -4,334
  -4,509
  -4,688
  -4,872
  -5,063
  -5,261
  -5,468
Prev. year cash balance distribution, $m
 
  18
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  151
  176
  249
  346
  472
  631
  827
  1,062
  1,339
  1,660
  2,009
  2,422
  2,880
  3,384
  3,934
  4,527
  5,164
  5,842
  6,561
  7,321
  8,120
  8,957
  9,833
  10,747
  11,699
  12,691
  13,722
  14,794
  15,908
  17,065
Discount rate, %
 
  10.90
  11.45
  12.02
  12.62
  13.25
  13.91
  14.61
  15.34
  16.10
  16.91
  17.75
  18.64
  19.57
  20.55
  21.58
  22.66
  23.79
  24.98
  26.23
  27.54
  28.92
  30.37
  31.89
  33.48
  35.15
  36.91
  38.76
  40.69
  42.73
  44.87
PV of cash for distribution, $m
 
  136
  141
  177
  215
  254
  289
  318
  339
  349
  348
  333
  311
  282
  247
  210
  172
  137
  105
  78
  56
  39
  26
  17
  11
  6
  4
  2
  1
  1
  0
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

B&G Foods, Inc. manufactures, sells, and distributes a portfolio of shelf-stable, and frozen food and household products in the United States, Canada, and Puerto Rico. Its products include frozen and canned vegetables, hot cereals, fruit spreads, canned meats and beans, bagel chips, spices, seasonings, hot sauces, wine vinegar, maple syrup, molasses, salad dressings, pizza crusts, Mexican-style sauces, dry soups, taco shells and kits, salsas, pickles, peppers, tomato-based products, puffed corn and rice snacks, nut clusters, and other specialty products. The company markets its products under various brands, including Ac'cent, B&G, B&M, Baker's Joy, Bear Creek Country Kitchens, Brer Rabbit, Canoleo, Cary's, Cream of Rice, Cream of Wheat, Devonsheer, Don Pepino, Emeril's, Grandma's Molasses, Green Giant, JJ Flats, Joan of Arc, Las Palmas, Le Sueur, MacDonald's, Mama Mary's, Maple Grove Farms of Vermont, Molly McButter, Mrs. Dash, New York Flatbreads, New York Style, Old London, Original Tings, Ortega, Pirate's Booty, Polaner, Red Devil, Regina, Rickland Orchards, Sa-són, Sclafani, Smart Puffs, Spring Tree, Sugar Twin, Trappey's, TrueNorth, Underwood, Vermont Maid, and Wright's. It also sells and distributes household products under the Static Guard brand. B&G Foods, Inc. offers its products directly, as well as through a network of independent brokers and distributors to supermarket chains, food service outlets, mass merchants, warehouse clubs, non-food outlets, and specialty distributors. The company was formerly known as B&G Foods Holdings Corp. and changed its name to B&G Foods, Inc. in October 2004. B&G Foods, Inc. was founded in 1996 and is headquartered in Parsippany, New Jersey.

FINANCIAL RATIOS  of  B&G Foods (BGS)

Valuation Ratios
P/E Ratio 22.6
Price to Sales 1.8
Price to Book 3.1
Price to Tangible Book
Price to Cash Flow 8.5
Price to Free Cash Flow 9.9
Growth Rates
Sales Growth Rate 44%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 121.1%
Cap. Spend. - 3 Yr. Gr. Rate 22.9%
Financial Strength
Quick Ratio 3
Current Ratio 0
LT Debt to Equity 218.2%
Total Debt to Equity 219.6%
Interest Coverage 4
Management Effectiveness
Return On Assets 5.4%
Ret/ On Assets - 3 Yr. Avg. 4.8%
Return On Total Capital 4.6%
Ret/ On T. Cap. - 3 Yr. Avg. 3.9%
Return On Equity 17.5%
Return On Equity - 3 Yr. Avg. 15.4%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 32.2%
Gross Margin - 3 Yr. Avg. 30.5%
EBITDA Margin 20.4%
EBITDA Margin - 3 Yr. Avg. 18.9%
Operating Margin 18%
Oper. Margin - 3 Yr. Avg. 16.3%
Pre-Tax Margin 12.7%
Pre-Tax Margin - 3 Yr. Avg. 10.9%
Net Profit Margin 7.8%
Net Profit Margin - 3 Yr. Avg. 6.6%
Effective Tax Rate 38.4%
Eff/ Tax Rate - 3 Yr. Avg. 39.1%
Payout Ratio 92.7%

BGS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the BGS stock intrinsic value calculation we used $1391 million for the last fiscal year's total revenue generated by B&G Foods. The default revenue input number comes from 2016 income statement of B&G Foods. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our BGS stock valuation model: a) initial revenue growth rate of 44% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 10.9%, whose default value for BGS is calculated based on our internal credit rating of B&G Foods, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of B&G Foods.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of BGS stock the variable cost ratio is equal to 81.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $8 million in the base year in the intrinsic value calculation for BGS stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for B&G Foods.

Corporate tax rate of 27% is the nominal tax rate for B&G Foods. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the BGS stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for BGS are equal to 116.3%.

Life of production assets of 74.5 years is the average useful life of capital assets used in B&G Foods operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for BGS is equal to 23.4%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $786 million for B&G Foods - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 65.728 million for B&G Foods is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of B&G Foods at the current share price and the inputted number of shares is $2.4 billion.


Premium access subscription - $499/yr

please register and log in before paying
RELATED COMPANIES Price Int.Val. Rating
GIS General Mills 55.94 prem.  prem.
THS TreeHouse Food 80.24 prem.  prem.
BOBE Bob Evans Farm 72.53 prem.  prem.
LANC Lancaster Colo 123.09 prem.  prem.
PF Pinnacle Foods 61.92 prem.  prem.
POST Post Holdings 77.60 prem.  prem.
KHC Kraft Heinz 88.85 prem.  prem.
SENEA Seneca Foods C 31.35 prem.  prem.

COMPANY NEWS

▶ B&G Foods, Inc. Value Analysis (NYSE:BGS) : June 15, 2017   [Jun-15-17 04:09PM  Capital Cube]
▶ ETFs with exposure to B&G Foods, Inc. : June 2, 2017   [Jun-02-17 01:54PM  Capital Cube]
▶ Top Ranked Income Stocks to Buy for May 26th   [May-26-17 09:36AM  Zacks]
▶ B&G Foods Declares Regular Quarterly Dividend   [May-23-17 06:31PM  Business Wire]
▶ ETFs with exposure to B&G Foods, Inc. : May 12, 2017   [May-12-17 03:43PM  Capital Cube]
▶ B&G Foods to Present at Spring Investor Conferences   [May-05-17 04:05PM  Business Wire]
▶ B&G Foods posts 1Q profit   [May-04-17 05:47PM  Associated Press]
▶ New Strong Sell Stocks for March 22nd   [Mar-22-17 11:17AM  Zacks]
▶ 3 Stocks to Buy With Dividends Yielding 4% or More   [Feb-22-17 08:26PM  at Motley Fool]
▶ B&G Foods Declares Regular Quarterly Dividend   [Feb-21-17 06:05PM  Business Wire]
▶ [$$] LBO Focus: Private Equity Whets Appetite for Ingredients Deals   [Feb-01-17 09:24AM  at The Wall Street Journal]
▶ Top Ranked Income Stocks to Buy for January 6th   [Jan-06-17 10:47AM  Zacks]
▶ B&G Foods to Present at the 19th Annual ICR Conference   [Jan-04-17 08:30AM  Business Wire]
Stock chart of BGS Financial statements of BGS Annual reports of BGS
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

FREE DOWNLOAD
Follow us on:   twitter   twitter   twitter   twitter

VALUATION THEORY       ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2017. All rigths reserved.