Company Overview
Brookfield Business Partners L.P. operates as a private equity firm that specializes in growth capital, divestitures, and acquisitions across the industrials sector. The company focuses its investment activities within the conglomerates industry, targeting business services, infrastructure services, construction, energy, and industrials sectors with a preference for global markets. This investment strategy allows the firm to aggregate assets and generate value through operational improvements and strategic exits in diverse industrial verticals. In terms of scale, the company maintains a market capitalization of $2.85B and reports annual revenue of $27.46B, while the specific count of employees is not disclosed in available data. The market cap of $2.85B indicates a mid-to-large cap status relative to many specialized industrial firms, suggesting a significant aggregate asset base, whereas the revenue figure of $27.46B demonstrates substantial operational breadth across its portfolio of businesses. These financial metrics collectively position the entity as a major player in the industrial conglomerate space, capable of influencing its specific industry segments through large-scale acquisitions and divestiture activities.
Financial Health
The company reported revenue of $27.46B for the trailing twelve months, yet it recorded a net income of -$26,000,000 and an EBITDA of $7.18B. The significant gap between the $27.46B in revenue and the negative net income reveals a cost structure where operating expenses, interest obligations, or non-operating charges have exceeded earnings before interest and taxes to the point of reducing total profitability. While the company has not disclosed specific free cash flow figures, the presence of $7.18B in EBITDA suggests a potential for robust cash generation before capital expenditures and debt servicing, though the lack of explicit free cash flow data limits a direct assessment of immediate liquidity flexibility. The gross margin stands at 19.3%, indicating that the company retains $0.193 for every dollar of revenue after covering direct production costs, which is typical for service-heavy industrial conglomerates. The operating margin is 16.7%, reflecting the efficiency of core business operations after overhead costs, while the profit margin of -0.1% highlights that net losses are currently impacting overall profitability despite strong operating cash flows. On the balance sheet, the company holds $3.55B in cash against $43.75B in total debt, resulting in a debt-to-equity ratio of 285.74, which indicates a highly leveraged financial structure. The current ratio of 1.12 suggests that the company has slightly more current assets than current liabilities, indicating a marginally comfortable position regarding short-term liquidity obligations. Return on Equity is 2.4% and Return on Assets is 3.4%, metrics that reveal management is generating modest returns relative to the capital invested and the total asset base, respectively.
Valuation Assessment
The stock trades with a trailing P/E ratio that is effectively negative due to the net loss, while the forward P/E is 13.28, implying that the market prices in a future recovery in earnings or a normalization of profitability. The price-to-book ratio is 2.95, indicating that the market values the company at nearly three times its book value, which suggests a premium over the net asset value of its underlying portfolio. The price-to-sales ratio is 0.10, a metric that suggests the market values the company at a fraction of its total revenue, a common characteristic for capital-intensive or loss-making industrial firms. Additionally, the EV/EBITDA multiple is 8.35, providing an enterprise valuation metric that accounts for debt and cash, suggesting the company is valued at a reasonable multiple relative to its operational earnings power. The stock has a 52-week high of $37.75 and a 52-week low of $18.63, and based on the current trading dynamics relative to these extremes, the price fluctuates within a wide range reflecting market sentiment on the asset-heavy model. The beta value is 1.32, meaning the stock price is expected to be 32% more volatile than the broader market index, indicating higher sensitivity to market swings compared to a standard industrial peer.
Growth & Income
Revenue growth over the last year was -4.5%, while earnings growth is not available due to the recent net loss, indicating that revenue contraction is occurring alongside negative earnings. The negative revenue growth rate suggests the company is currently experiencing a contraction in its portfolio value or operational scale, which naturally complicates the comparison of earnings growth trajectories. For dividend payers, the company offers a dividend yield of 0.8% with a payout ratio of 3.1%, a figure that appears low but must be viewed in the context of negative net income where traditional payout sustainability metrics are distorted. The low payout ratio combined with negative net income implies that the dividend is likely funded by cash flow or reserves rather than distributable earnings, a common practice for REITs and business trusts with high leverage. Overall, the growth and income profile is characterized by revenue contraction, high leverage, and a dividend yield that does not reflect current net income performance but relies on underlying cash generation capabilities.