Is the Burberry share price expensive at 1,919p (LON:BRBY)?

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.

What does this mean for potential investors?

Some of the best quality stocks in the market have defensible models that can deliver high levels of shareholder returns over the long term. But there are no guarantees and it's important to do your own research. Indeed, we've identified some areas of concern with Burberry that you can find out about here.