Intrinsic value of B&G Foods, Inc. - BGS

Previous Close

$24.56

  Intrinsic Value

$34.72

stock screener

  Rating & Target

buy

+41%

Previous close

$24.56

 
Intrinsic value

$34.72

 
Up/down potential

+41%

 
Rating

buy

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 0001), $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 1.6

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  1,735
  1,775
  1,821
  1,872
  1,928
  1,991
  2,059
  2,132
  2,211
  2,296
  2,387
  2,484
  2,587
  2,696
  2,813
  2,936
  3,066
  3,204
  3,350
  3,504
  3,666
  3,838
  4,018
  4,208
  4,409
  4,620
  4,842
  5,075
  5,321
  5,580
Variable operating expenses, $m
  1,479
  1,508
  1,541
  1,578
  1,620
  1,665
  1,714
  1,768
  1,825
  1,887
  1,735
  1,805
  1,880
  1,960
  2,044
  2,134
  2,229
  2,329
  2,435
  2,547
  2,665
  2,789
  2,921
  3,059
  3,204
  3,358
  3,519
  3,689
  3,868
  4,056
Fixed operating expenses, $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
Total operating expenses, $m
  1,479
  1,508
  1,541
  1,578
  1,620
  1,665
  1,714
  1,768
  1,825
  1,887
  1,735
  1,805
  1,880
  1,960
  2,044
  2,134
  2,229
  2,329
  2,435
  2,547
  2,665
  2,789
  2,921
  3,059
  3,204
  3,358
  3,519
  3,689
  3,868
  4,056
Operating income, $m
  256
  267
  279
  293
  309
  326
  344
  364
  386
  409
  652
  678
  707
  737
  768
  802
  838
  875
  915
  957
  1,002
  1,048
  1,098
  1,150
  1,204
  1,262
  1,323
  1,386
  1,454
  1,524
EBITDA, $m
  522
  534
  548
  563
  581
  599
  620
  642
  666
  691
  718
  748
  779
  812
  847
  884
  923
  965
  1,008
  1,055
  1,104
  1,155
  1,210
  1,267
  1,327
  1,391
  1,458
  1,528
  1,602
  1,680
Interest expense (income), $m
  70
  92
  94
  97
  100
  104
  108
  112
  117
  122
  128
  134
  140
  147
  154
  162
  170
  179
  188
  198
  208
  219
  231
  243
  256
  269
  283
  298
  314
  331
  348
Earnings before tax, $m
  164
  173
  183
  193
  205
  218
  232
  248
  264
  281
  518
  538
  560
  582
  606
  632
  659
  687
  717
  749
  782
  817
  855
  894
  935
  978
  1,024
  1,072
  1,123
  1,176
Tax expense, $m
  44
  47
  49
  52
  55
  59
  63
  67
  71
  76
  140
  145
  151
  157
  164
  171
  178
  185
  194
  202
  211
  221
  231
  241
  252
  264
  277
  290
  303
  318
Net income, $m
  120
  126
  133
  141
  150
  159
  170
  181
  193
  205
  378
  393
  409
  425
  443
  461
  481
  502
  523
  547
  571
  597
  624
  652
  683
  714
  748
  783
  820
  859

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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
Total assets, $m
  3,115
  3,187
  3,268
  3,360
  3,462
  3,574
  3,696
  3,828
  3,970
  4,122
  4,285
  4,459
  4,644
  4,841
  5,049
  5,271
  5,505
  5,753
  6,014
  6,291
  6,582
  6,890
  7,214
  7,556
  7,915
  8,294
  8,693
  9,112
  9,553
  10,018
Adjusted assets (=assets-cash), $m
  3,115
  3,187
  3,268
  3,360
  3,462
  3,574
  3,696
  3,828
  3,970
  4,122
  4,285
  4,459
  4,644
  4,841
  5,049
  5,271
  5,505
  5,753
  6,014
  6,291
  6,582
  6,890
  7,214
  7,556
  7,915
  8,294
  8,693
  9,112
  9,553
  10,018
Revenue / Adjusted assets
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
  0.557
Average production assets, $m
  1,450
  1,484
  1,522
  1,565
  1,612
  1,664
  1,721
  1,782
  1,848
  1,919
  1,995
  2,076
  2,162
  2,254
  2,351
  2,454
  2,563
  2,679
  2,801
  2,929
  3,065
  3,208
  3,359
  3,518
  3,686
  3,862
  4,048
  4,243
  4,449
  4,665
Working capital, $m
  323
  330
  339
  348
  359
  370
  383
  397
  411
  427
  444
  462
  481
  502
  523
  546
  570
  596
  623
  652
  682
  714
  747
  783
  820
  859
  901
  944
  990
  1,038
Total debt, $m
  1,677
  1,728
  1,785
  1,850
  1,922
  2,001
  2,087
  2,180
  2,280
  2,387
  2,502
  2,625
  2,755
  2,894
  3,041
  3,197
  3,362
  3,537
  3,721
  3,916
  4,122
  4,339
  4,567
  4,808
  5,061
  5,328
  5,609
  5,905
  6,216
  6,543
Total liabilities, $m
  2,196
  2,247
  2,304
  2,369
  2,441
  2,520
  2,606
  2,698
  2,799
  2,906
  3,021
  3,143
  3,274
  3,413
  3,560
  3,716
  3,881
  4,056
  4,240
  4,435
  4,641
  4,857
  5,086
  5,327
  5,580
  5,847
  6,128
  6,424
  6,735
  7,062
Total equity, $m
  919
  940
  964
  991
  1,021
  1,054
  1,090
  1,129
  1,171
  1,216
  1,264
  1,315
  1,370
  1,428
  1,490
  1,555
  1,624
  1,697
  1,774
  1,856
  1,942
  2,033
  2,128
  2,229
  2,335
  2,447
  2,564
  2,688
  2,818
  2,955
Total liabilities and equity, $m
  3,115
  3,187
  3,268
  3,360
  3,462
  3,574
  3,696
  3,827
  3,970
  4,122
  4,285
  4,458
  4,644
  4,841
  5,050
  5,271
  5,505
  5,753
  6,014
  6,291
  6,583
  6,890
  7,214
  7,556
  7,915
  8,294
  8,692
  9,112
  9,553
  10,017
Debt-to-equity ratio
  1.830
  1.840
  1.850
  1.870
  1.880
  1.900
  1.910
  1.930
  1.950
  1.960
  1.980
  2.000
  2.010
  2.030
  2.040
  2.060
  2.070
  2.080
  2.100
  2.110
  2.120
  2.130
  2.150
  2.160
  2.170
  2.180
  2.190
  2.200
  2.210
  2.210
Adjusted equity ratio
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  120
  126
  133
  141
  150
  159
  170
  181
  193
  205
  378
  393
  409
  425
  443
  461
  481
  502
  523
  547
  571
  597
  624
  652
  683
  714
  748
  783
  820
  859
Depreciation, amort., depletion, $m
  266
  267
  269
  270
  272
  273
  275
  277
  280
  282
  67
  69
  72
  75
  78
  82
  85
  89
  93
  98
  102
  107
  112
  117
  123
  129
  135
  141
  148
  155
Funds from operations, $m
  386
  394
  402
  411
  422
  433
  445
  458
  472
  487
  445
  462
  481
  500
  521
  543
  566
  591
  617
  644
  673
  704
  736
  770
  805
  843
  883
  924
  968
  1,014
Change in working capital, $m
  6
  7
  8
  10
  11
  12
  13
  14
  15
  16
  17
  18
  19
  20
  22
  23
  24
  26
  27
  29
  30
  32
  34
  35
  37
  39
  41
  43
  46
  48
Cash from operations, $m
  380
  386
  394
  402
  411
  421
  432
  444
  458
  472
  428
  444
  461
  480
  499
  520
  542
  565
  590
  616
  643
  672
  702
  734
  768
  804
  841
  881
  922
  966
Maintenance CAPEX, $m
  -47
  -48
  -49
  -51
  -52
  -54
  -55
  -57
  -59
  -62
  -64
  -67
  -69
  -72
  -75
  -78
  -82
  -85
  -89
  -93
  -98
  -102
  -107
  -112
  -117
  -123
  -129
  -135
  -141
  -148
New CAPEX, $m
  -29
  -33
  -38
  -43
  -47
  -52
  -57
  -61
  -66
  -71
  -76
  -81
  -86
  -92
  -97
  -103
  -109
  -115
  -122
  -129
  -136
  -143
  -151
  -159
  -167
  -176
  -186
  -195
  -205
  -216
Cash from investing activities, $m
  -76
  -81
  -87
  -94
  -99
  -106
  -112
  -118
  -125
  -133
  -140
  -148
  -155
  -164
  -172
  -181
  -191
  -200
  -211
  -222
  -234
  -245
  -258
  -271
  -284
  -299
  -315
  -330
  -346
  -364
Free cash flow, $m
  304
  305
  306
  308
  311
  315
  320
  326
  332
  339
  288
  297
  306
  316
  327
  339
  351
  364
  379
  394
  410
  426
  444
  463
  483
  505
  527
  550
  575
  601
Issuance/(repayment) of debt, $m
  41
  51
  58
  65
  72
  79
  86
  93
  100
  107
  115
  123
  131
  139
  147
  156
  165
  175
  185
  195
  206
  217
  229
  241
  254
  267
  281
  296
  311
  327
Issuance/(repurchase) of shares, $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 from financing (excl. dividends), $m  
  41
  51
  58
  65
  72
  79
  86
  93
  100
  107
  115
  123
  131
  139
  147
  156
  165
  175
  185
  195
  206
  217
  229
  241
  254
  267
  281
  296
  311
  327
Total cash flow (excl. dividends), $m
  345
  355
  364
  373
  383
  394
  406
  419
  432
  447
  403
  419
  437
  455
  474
  495
  516
  539
  563
  588
  615
  643
  673
  704
  737
  772
  808
  846
  886
  929
Retained Cash Flow (-), $m
  -19
  -21
  -24
  -27
  -30
  -33
  -36
  -39
  -42
  -45
  -48
  -51
  -55
  -58
  -62
  -65
  -69
  -73
  -77
  -82
  -86
  -91
  -96
  -101
  -106
  -112
  -118
  -124
  -130
  -137
Prev. year cash balance distribution, $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 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
  326
  334
  339
  346
  353
  361
  370
  380
  390
  402
  355
  368
  382
  397
  413
  429
  447
  466
  486
  507
  529
  553
  577
  603
  631
  660
  690
  722
  756
  792
Discount rate, %
  9.60
  10.08
  10.58
  11.11
  11.67
  12.25
  12.86
  13.51
  14.18
  14.89
  15.64
  16.42
  17.24
  18.10
  19.01
  19.96
  20.96
  22.00
  23.10
  24.26
  25.47
  26.75
  28.08
  29.49
  30.96
  32.51
  34.13
  35.84
  37.63
  39.51
PV of cash for distribution, $m
  298
  276
  251
  227
  203
  181
  159
  138
  118
  100
  72
  59
  48
  39
  30
  23
  18
  13
  9
  7
  5
  3
  2
  1
  1
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  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. (B&G Foods) is a holding company. The Company manufactures, sells and distributes a portfolio of shelf-stable and frozen foods across 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. Its products are marketed 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, Durkee, New York Style, Old London, Original Tings, Ortega, Spice Islands, Spring Tree, Static Guard, Sugar Twin, Tone's, Trappey's, TrueNorth, Underwood, Vermont Maid, Victoria, Weber and Wright's.

FINANCIAL RATIOS  of  B&G Foods, Inc. (BGS)

Valuation Ratios
P/E Ratio 15
Price to Sales 1.2
Price to Book 2.1
Price to Tangible Book
Price to Cash Flow 5.6
Price to Free Cash Flow 6.6
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 $1701 million for the last fiscal year's total revenue generated by B&G Foods, Inc.. The default revenue input number comes from 0001 income statement of B&G Foods, Inc.. 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 2% 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 9.6%, whose default value for BGS is calculated based on our internal credit rating of B&G Foods, Inc., 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, Inc..
    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 85.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 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 5.6% for B&G Foods, Inc..

Corporate tax rate of 27% is the nominal tax rate for B&G Foods, Inc.. 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 83.6%.

Life of production assets of 47.8 years is the average useful life of capital assets used in B&G Foods, Inc. 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 18.6%. 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 - $900.049 million for B&G Foods, Inc. - 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 65.684 million for B&G Foods, Inc. 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, Inc. at the current share price and the inputted number of shares is $1.6 billion.

RELATED COMPANIES Price Int.Val. Rating
GIS General Mills, 50.22 56.68  hold
LANC Lancaster Colo 144.54 80.16  sell
KHC The Kraft Hein 32.52 86.41  str.buy
SENEA Seneca Foods C 24.09 10.73  str.sell

CONTACT US      

About X-FIN       Privacy policy       Terms of use      

Copyright © X-FIN.com 2005-2019. All rigths reserved.