NEWS BITES - BRIC
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Banco do Brasil SA (SA: BBAS3 R$47.74) ranks 9 in the Top 20 by dividend yielding stocks in the Bovespa Index of 91 stocks.
Banco do Brasil SA is Brazil's largest Bank by market cap.
Past 12 months DPS: R$5.27;
Last price: R$47.74;
Dividend yield: 11.0%;
BANCO DO BRASIL (BBAS3) Stock Dashboard [traded in Brazilian Real, BRL] End-of-Day
| Exchange | BRAZILIAN [Sao Paulo] | Ave Daily Volume | 15,029,000 shares |
| Currency | 1.000 USD = 4.92 Brazilian Real (BRL) | 52-Week Price Range | 28.25 - 47.74 |
| Jun 09, 2023 | BRL47.74 | Sector | Bank |
| EPS (FY2022) | BRL10.79 | Independent Rating | Ranked 268 in Forbes 2000 |
| BBAS3 P/E | Stock 4.4; Sector 4.2 | Market Cap | BRL137 billion [US$28 billion] |
| BBAS3 Dividend Yield % (TTM) | Stock 11; Sector 7.6 | Shares Outstanding | 2,865,417,020 |
| DPS (past 12 months) | BRL4 | BBAS3 in Indices | Bovespa [of 92 stocks] |
| EPS Growth (FY2022 vs FY2021) | 57.3% | PVBRL1000 (1 yr) PVUS$1000 (1 yr) | BRL1,802 US$1,788* |
*If You Invested $1,000 in Banco do Brasil a year ago, This is How Much You Would Have Today: $1,788. USD1000 would have bought BRL4,891 for 159.4 shares (@the then price of 30.68) worth BRL1,802 @47.74 today. Dividends reinvested are worth $244.
INDEX
SECTION 1 RECENT NEWS AND RESEARCH
SECTION 2 TODAY'S BULLISH SIGNALS
SECTION 3 ONGOING BULLISH PARAMETERS
SECTION 4 TODAY'S BEARISH SIGNALS
SECTION 5 ONGOING BEARISH PARAMETERS
SECTION 6 CORPORATE PROFILE
SECTION 7 BANK METRICS
APPENDIX I DATA & ARCHIVE DOWNLOAD CENTER
APPENDIX II STOCK IDENTIFIERS
GLOSSARY
SECTION 1 RECENT NEWS AND RESEARCH
ex-Dividend since Jun 2
BANCO DO BRASIL EX-DIVIDENDS SINCE JUN 2
The shares surged 6.4% in the 4 trading sessions since the ex-dividend date of June 02. The company paid a dividend of 65.44 centavos per share. Based on dividends of R$5.27 per share for the trailing twelve months and the last price of R$47.74 the dividend yield is 11.0%.
Bullish Turning Points
Price/Earnings of 4.4 close to historical low
The P/E of 4.4 is 0.4 times the highest average P/E of 12 in the last five years. This is a value criterion, according to Benjamin Graham who described as a value criterion "A P/E ratio down to less than four-tenth of the highest average P/E ratio the stock attained in the most recent five years".
New 52-week High
The price increase of 4.9% was fuelled by a new 52-week high. On the previous day, the price decreased by 0.04%. The price swing indicates a bullish trend might be sustained in the short-term.
Press Releases and Corporate Wire
June 05: Banco do Brasil announces dividend
Banco do Brasil today announced a cash dividend of 12.30 centavos per share. The ex-dividend date is Friday, June 02, 2023 and the record date is Thursday, June 01, 2023 and it is payable on Monday, June 12.
June 05: Banco do Brasil announces dividend
Banco do Brasil today announced a special dividend of 65.44 centavos per share. The ex-dividend date is Friday, June 02, 2023 and the record date is Thursday, June 01, 2023 and it is payable on Monday, June 12.
May 29: Banco do Brasil announces dividend
Banco do Brasil today announced a special dividend of 33.86 centavos per share. The ex-dividend date is Tuesday, June 13, 2023 and the record date is Monday, June 12, 2023 and it is payable on Friday, June 30.
SECTION 2 TODAY'S BULLISH SIGNALS
2.1 Relative Value Indicators: Undervaluation compared with sector averages
Price/Earnings:
Banco do Brasil stock is trading at the second lowest P/E multiple in the Bovespa Index.Banco do Brasil stock is the ninth highest dividend yielding stock in the Bovespa Index.
2.2 Relative Value Indicators: Undervaluation compared with Index averages and bond yield
- Earnings yield of 22.6% is more attractive compared with the Brazilian average earning yield of 15.5%.
- The earnings yield of 22.6% is 2.0 times the 10-year bond yield of 11.6%.
(All figures in %)
| Earnings Yield | 22.6 |
| Brazilian avg | 15.5 |
| Dividend Yield | 11.0 |
| Bond Yield | 11.6 |
Dividend Yield > 2/3rd Bond Yield:
The dividend yield of 11.03% is 0.95 times the triple-A bond yield of 11.57%; it is also above the benchmark of 2/3rd set by Benjamin Graham.
(All figures in %)
| Dividend Yield | 11.03 |
| Bond Yield | 11.57 |
| Spread | 0.54 |
The Dividend Yield of 11% is better than the Index average of 9.1%
- The relative yield of the stock, defined by its yield of 11%, divided by average yield of dividend yielding stocks in the Bovespa Index of 9.1% is 121.9%. This suggests the stock is undervalued in dividend yield terms.
| Sector | P/E | Dividend Yield % | |
| Corporate Knights | Stock: 4.4; Sector: 20.3 | Stock: 11.0; Sector: 0.8 | undervalued |
| Forbes 2000 | Stock: 4.4; Sector: 15.3 | Stock: 11.0; Sector: 1.0 | undervalued |
2.3 Rank in the top 21% by Relative Valuation in the Brazilian market
| Description | Value | Rank |
| Price/Earnings | 4.4 | In Top 14% |
| Dividend Yield % | 11% | In Top 14% |
| Price/Earnings/Growth | 0.08 | In Top 15% |
| P/E * P/NTA | 3.98 | In Top 21% |
2.4 Rank in the top 22% by Price Performance in the Brazilian market
| Description | Value | Rank |
| PV1000 [1 yr] $ | 1,788 | In Top 12% |
| Rel Strength 6 mo | 84 | In Top 17% |
| 1-week Price Change % | 8.6 | In Top 22% |
2.5 Uptrend
Beta > 1 combined with price rise. The Beta of the stock is 1.5.
Price/Moving Average Price of 1.28 and positive MACD:
- The Price/MAP 200 for Banco do Brasil is 1.28. Being higher than 1 is a bullish indicator. It is higher than the Price/MAP 200 for the Bovespa Index of 1.07, a second bullish indicator. The stock is trading above both its MAPs and the 50-day MAP of R$42.16 is higher than the 200-day MAP of R$37.37, a third bullish indicator. The 200-day MAP has increased to R$37.37, a fourth bullish indicator.
- The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 44.9 minus the 26-day EMA of 43.79 is positive, suggesting a bullish signal. Both the 12-day EMA as well as the 26-day EMA are rising, another bullish signal.
- The price to 50-day EMAP ratio is 1.1, a bullish indicator. The 50-day EMAP has increased to R$42.38. An increase is another bullish indicator.
Past Month:
- Rises to Falls: In the past month the number of rises outnumbered falls 14:9 or 1.6:1.
Past Quarter:
In the last three months the stock has hit a new 52-week high fourteen times, pointing to a significant uptrend. The Best 3 weeks in the past quarter
In the past quarter the week beginning Monday April 10 saw the highest weekly rise of 11.3% for a relative price increase of 5.9%. The rise was propped up by volume of 5.7 times average.
| Mon-Fri | Change % | Bovespa Index Change % | Vol Ind [1 is avg] |
| Apr 10-14 | 11.3 | 5.4 | 5.7 |
| Jun 05-09 | 8.6 | 4 | 0.9 |
| Mar 27-31 | 4 | 3.1 | 2 |
Relative Strength (6 months) 84 percentile:
- The stock has a 6-month relative strength of 84 in the Brazilian market of 239 stocks and 80 preference stocks which means it is beating 84% of the market.
- A price rise combined with a high relative strength is a bullish signal.
SECTION 3 ONGOING BULLISH PARAMETERS
3.1 Growth in annual dividends per share and earnings per share
- Banco do Brasil sees dividend rise for a second consecutive year
Banco do Brasil reported dividends per share of R$5.27 in the past year, up 164.7% from the previous year. This is the second consecutive dividend increase. In the past 2 years average annual compound growth rate of dividends was 86.8%.
- EPS growth [FY2022 vs FY2021] of 57.3%:
| FY | EPS (R$) | Growth % |
| 2022 | 10.79 | 57.3 |
| 2021 | 6.86 | 56.3 |
3.2 Rule of 40
The stock scores a favorable score exceeding 40 when using the Rule of 40 (Revenue Growth plus EBITDA margin). Y.o.y revenue growth of 81%, EBITDA margin is 19.5% and the sum of the two 100.8% needs to exceed 40%.
3.3 Past three-years
- The shares extended their rose from R$1.05 (3.7%) 2 years ago to R$1.47 (5.0%) a year ago.
- Banco do Brasil rose for a third consecutive year. In the past three years it has risen R$19.62 (69.8%).
3.4 Present Value of R$1000 Invested in the Past [3 Mo, 1 Yr, 3 Yrs]; The Best Periods with PVR$1000 > 1,257
| PVR$1,000 | 3 mo ago | 1 yr ago | 3 yrs ago |
| BBAS3.SA | R$1,258 | R$1,802 | R$2,290 |
| Bank sector | R$1,252 | R$1,194 | R$1,106 |
| Bovespa Index | R$1,120 | R$1,093 | R$1,209 |
3.5 The Best Periods [3 Mo, 1 Yr, 3 Yrs] with Price Change % > 22.4
3-Year price change of 73.6% for Banco do Brasil outperformed the change of 19.8% in the Bovespa Index for a relative price change of 53.8%.
| Price Change % | Quarter | Year | 3 Years |
| Banco do Brasil | 22.5 | 55.6 | 73.6 |
| Bank sector | 25.2 | 19.4 | 10.6 |
| Bovespa Index | 12.8 | 8 | 19.8 |
3.6 Created Market Value [CMV] past 14 yrs of R$72.8 billion ($14.8 billion)
- Market Capitalization has increased by R$74.4 billion from R$62.4 billion to R$136.8 billion in the last 14 years. This increase comprises cumulative retained earnings (RETE) of R$1.7 billion and Created Market Value of R$72.8 billion. The Created Market Value multiple, defined by the change in MCap for every R$1 of retained earnings is exemplary at R$44.78.
3.7 Annualised Period-based Total Shareholder Returns [TSR %]: The Best Periods with TSR > 19.3%
| TSR % | 1 yr | 3 yrs | 5 yrs | 10 yrs |
| BBAS3.SA | 80.2 | 31.4 | 30.4 | 19.4 |
3.8 P/E/G < 1
The price earnings ratio of 4.4 divided by trailing twelve months eps growth of 57.3% corresponds to an attractive P/E/G of 0.1 times; being less than the value benchmark of 1.0.
| EPS Growth (%) | 57.29 |
| P/E/G | 0.08 |
| P/E | 4.42 |
3.9 Increased Volume, up 33% in 5 years
In the past five years, Average Daily Volume of Trading (ADVT) has increased 33.0% to 15 million shares.
Avg. Daily Volume Traded 12 months ended Jun 09, million shares
| Year | ADVT |
| 2023 | 15.0 |
| 2022 | 12.5 |
| 2021 | 16.7 |
| 2020 | 14.3 |
| 2019 | 11.3 |
3.10 Increased VWAP, up 22% in 5 years
In the past five years Volume Weighted Average Price (VWAP) has increased by 22.4% to R$36.28.
Past five years, 12 months ended Jun 09 (BRL)
| Year | High Price | VWAP | Low Price |
| 2023 | 47.74 | 36.28 | 28.25 |
| 2022 | 33.52 | 27.49 | 23.25 |
| 2021 | 32.5 | 26.23 | 21.98 |
| 2020 | 41.82 | 30.8 | 17.12 |
| 2019 | 40.91 | 29.63 | 17.23 |
3.11 Increased share turnover, up 66% in 5 years
In the past five years, average daily share turnover has increased 65.7% to R$543.6 million ($110.4 million). This suggests increased liquidity.
Past five years, 12 months ended Jun 09 (BRL million)
| Year | Average Daily Turnover |
| 2023 | 543.6 |
| 2022 | 342.9 |
| 2021 | 431.8 |
| 2020 | 437.4 |
| 2019 | 328.1 |
3.12 Satisfies one criterion of Benjamin Graham
- The P/E of 4.4 multiplied by the P/NTA of 0.9 is 4.0. Being less than the Benjamin Graham benchmark of 22.5 the stock appears undervalued.
3.13 Satisfies 5 out of 9 criteria of Joseph Piotroski [pass mark 5]:
- Positive net income.
- Positive operating cashflow.
- Return on Assets improvement [from 1% to 1.5%].
- Good quality of earnings [operating cashflow exceeds net income].
- Improvement in asset turnover [growth in revenue of 81.3 exceeded growth in assets of 5%].
But does not meet the following 4 criteria of Joseph Piotroski:
- Improvement in long-term debt to total assets.
- Improvement in current ratio.
- Total shares on issue unchanged (or reduction in total shares on issue).
- Improvement in gross margin.
SECTION 4 TODAY'S BEARISH SIGNALS
4.1 Other Bearish Signals
- Net profit margin has averaged 12.7% in the last 3 years. This is lower than the sector average of 30.5% and suggests a low margin of safety.
4.2 Overbought/Bearish/Resistance Signals:
- At R$47.74 the price has risen above the upper Bollinger band resistance of R$46.52, indicating a downside risk for it to fall back within the band.
- The Relative Strength Index (RSI) of 84.3 has penetrated the overbought line of 70, suggesting the price gain of 11.8% in the last 14 days is unusually high.
- The Money Flow Index [MFI] is 80.2 suggesting an overbought 14-day trend, being above 80. The Money Ratio of 4 suggests positive money flow was 4 times negative money flow.
SECTION 5 ONGOING BEARISH PARAMETERS
5.1 Total Shares on Issue: 5-Year Increase
In the past 5 years total shares on issue have increased by 68.9 million (2.5%) from 2.8 billion to 2.9 billion. Based on a dynamic start date of 5 years ago, there has been no decline in issued capital over the last 5 years. An increase in total shares on issue is an unfavourable indicator in Joseph Piotroski's 9 indicators.
| Year End (Dec 31) | Total Shares on Issue |
| 2022 | 2,853,771,411 |
| 2021 | 2,853,577,258 |
| 2020 | 2,852,522,381 |
| 2019 | 2,799,325,330 |
| 2018 | 2,785,597,388 |
| 2017 | 2,784,905,261 |
SECTION 6 CORPORATE PROFILE
6.1 Activities
Banco do Brasil S.A. attracts deposits and offers retail and commercial banking services. The Bank offers consumer, commercial, and agribusiness loans, asset management, foreign exchange, private pension, insurance, lease financing, credit cards, and Internet banking services. It is Brazil's largest Bank by market capitalisation.
6.2 Contact Details
| Website | http://WWW.BB.COM.BR |
| Physical Address | SBS Q-4 Bloco 3 Lote 32 Plano Piloto Brasilia, DF 70089-900 Brazil |
| Phone | (21)3808 3715 |
| Fax | (21)3808 3466 |
| ri@bb.com.br |
6.3 Industry & Sector [of 75 stocks]
| Classification Level | Name of Sector |
| Business Sector | Banking & Investment Services |
| Industry Group | Banking Services |
| Industry | Banks |
| Economic Sector | Financials |
SECTION 7 BANK METRICS
7.1 Bank Metrics (FY2022)
All values are in R$ billion
| Description | FY2022 | FY2021 | Change |
| Provision | 8.2 | 8.1 | Up 0.3% |
Unfavourable Changes:
- Provision up 0.3% from R$8.1b to R$8.2b
APPENDIX I DATA & ARCHIVE DOWNLOAD CENTER
BBAS3: EXCEL TABLES ARE AVAILABLE TO EXPORT DATA:
+ PRICE VOLUME - 5-YEAR HISTORY
+ PEER COMPARISON - STOCK IN BANK SECTOR AND STOCK IN INDICES
BBAS3: LINKS IN HTML TO FURTHER INFORMATION:
+ NEWS ARCHIVES - BBAS3 PAST 4 YEARS IN HTML:
+ USD vs BRL EXCHANGE RATE CHARTS IN HTML
APPENDIX II STOCK IDENTIFIERS
ISIN: BRBBASACNOR3
PermID: 4295859896
RIC: BBAS3.SA
GLOSSARY
ADVT: Average Daily Volume of shares Traded
Annual Return: Dividends Paid In a 12-Month Period/Price at the Beginning of the Period + Capital Gain or Loss over 1 Year/Price 1 Year Ago (%)
Current Ratio: Current Assets/Current Liabilities (times)
Dividend Yield: Dividend Per Share/Share Price (%)
Earnings Yield: Earnings Per Share/Share Price (%)
Income during the n years (3/2/1): Dividends received during the Period
Moving Average Price (n periods): Sum of Prices for each Period/Number of Periods
PV1000: Present value of 1000 invested 1 year/'n' years ago
Price Close/Moving Avg Price: Latest Price/Moving Average Price
Price/Earnings: Share Price/Earnings Per Share (times)
Relative Price Change [RPC]: Relative price change is price change of stock with respect to Benchmark Index
Relative Strength (6 Months): Price close today/Price close 6 months ago, then ranked by percentile within the entire market.
Return on Assets: Net Profit/Total Assets (%)
Return on Equity (Shareholders' Funds): Net Profit/Net Assets (%)
TSR: Total Shareholder Returns is expressed as an annualized rate of return for shareholders after allowing for capital appreciation and dividend
TTM: Trailing 12 Months
Volatility: Highest Price minus Lowest Price/Lowest Price (%)
Volume Weighted Average Price (VWAP): The Volume Weighted Average Price (VWAP) is the summation of turnover divided by total volume in the same period.
Disclaimer: While this document is based on information sources which are considered reliable, it has been prepared without consideration of your specific investment objectives, financial situation or needs, so you should carry out your own analysis or seek professional investment advice before an investment decision is made. The document contains unbiased, independent equities data and analysis from Jupiter International (Australia) Pty Ltd trading as BuySellSignals (AFS Licence 222756), who provide round the clock analysis on every stock, every sector, every market, every day. BuySellSignals is not a broker, and does not have executing, corporate advisory or investment banking functions. Jupiter International (Australia) Pty Ltd, its directors, employees and contractors do not represent, warrant or guarantee, expressly or impliedly, that the information contained in this document is complete or accurate.
Data for the BuySellSignals algorithms is drawn from annual reports, company websites and similar sources of publicly available data. It should be used as a guide only.
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