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Is The Burberry Share Price Expensive At 1,919p (LON:BRBY)?

Published 23/02/2020, 06:55
Updated 09/07/2023, 11:32

Burberry (LON:BRBY) is a global luxury goods manufacturer, retailer and wholesaler. The group's premium branding gives it a valuable degree of pricing power, and over the past five years Burberry has generated returns on capital of 24.4%.

Right now the Burberry share price is on the expensive side from a factor perspective, based on its Value Rank of 27. Let's see why this is.

A closer look at Burberry's Value Rank

We can see by using Burberry’s StockReport that the group has a:

  • Rolling price to book value of 6.13,
  • Trailing twelve month price to earnings ratio of 21.0
  • Trailing twelve month price to free cashflow of 34.5
  • Rolling dividend yield of 2.26%
  • Trailing twelve-month price to sales ratio of 2.79
  • This combination of financial traits suggests that Burberry stock is toward the more expensive end of the market. Being expensive is not the end of the world, of course - but it does help to have favourable exposures to other factors to justify the share price premium.

    Studies indicate that combining factors such as Value, Quality and Momentum is a more effective way of outperforming the market over longer time frames. That's why we have constructed our StockReports to give an instant impression of how well exposed Burberry (LON:BRBY) is to these three factors. We go into greater detail on factor investing in this video.

    Disclaimer: These articles are provided for information purposes only. The content is not intended to be a personal recommendation. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser. The author has no position in the stocks mentioned, unless otherwise stated.

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