BROWN & BROWN INC (BRO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:BRO - US1152361010 - Common Stock
74.1 USD
-5.52 (-6.93%)
Taking everything into account, BRO scores 4 out of 10 in our fundamental rating. BRO was compared to 148 industry peers in the Insurance industry. BRO has only an average score on both its financial health and profitability. BRO has a expensive valuation and it also scores bad on growth.
1. Profitability
1.1 Basic Checks
- In the past year BRO was profitable.
- In the past year BRO had a positive cash flow from operations.
- Of the past 5 years BRO 4 years were profitable.
- Of the past 5 years BRO 4 years had a positive operating cash flow.
1.2 Ratios
- BRO's Return On Assets of 3.36% is fine compared to the rest of the industry. BRO outperforms 68.92% of its industry peers.
- BRO has a Return On Equity of 7.97%. This is in the lower half of the industry: BRO underperforms 66.22% of its industry peers.
- The Return On Invested Capital of BRO (5.43%) is better than 81.76% of its industry peers.
- BRO had an Average Return On Invested Capital over the past 3 years of 9.07%. This is significantly below the industry average of 14.94%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.36% | ||
| ROE | 7.97% | ||
| ROIC | 5.43% |
ROA(3y)5.35%
ROA(5y)5.42%
ROE(3y)14.98%
ROE(5y)14.21%
ROIC(3y)9.07%
ROIC(5y)8.85%
1.3 Margins
- With an excellent Profit Margin value of 18.02%, BRO belongs to the best of the industry, outperforming 86.49% of the companies in the same industry.
- In the last couple of years the Profit Margin of BRO has grown nicely.
- BRO's Operating Margin of 29.15% is amongst the best of the industry. BRO outperforms 91.22% of its industry peers.
- BRO's Operating Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 29.15% | ||
| PM (TTM) | 18.02% | ||
| GM | N/A |
OM growth 3Y2.76%
OM growth 5Y4.78%
PM growth 3Y2.76%
PM growth 5Y4.84%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
- BRO has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
- There is no outstanding debt for BRO. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
2.2 Solvency
- Based on the Altman-Z score of 1.70, we must say that BRO is in the distress zone and has some risk of bankruptcy.
- Looking at the Altman-Z score, with a value of 1.70, BRO belongs to the top of the industry, outperforming 88.51% of the companies in the same industry.
- The Debt to FCF ratio of BRO is 5.95, which is a neutral value as it means it would take BRO, 5.95 years of fcf income to pay off all of its debts.
- With a Debt to FCF ratio value of 5.95, BRO is not doing good in the industry: 64.86% of the companies in the same industry are doing better.
- A Debt/Equity ratio of 0.62 indicates that BRO is somewhat dependend on debt financing.
- BRO's Debt to Equity ratio of 0.62 is on the low side compared to the rest of the industry. BRO is outperformed by 77.70% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.62 | ||
| Debt/FCF | 5.95 | ||
| Altman-Z | 1.7 |
ROIC/WACC0.66
WACC8.26%
2.3 Liquidity
- BRO has a Current Ratio of 1.18. This is a normal value and indicates that BRO is financially healthy and should not expect problems in meeting its short term obligations.
- BRO has a Current ratio of 1.18. This is amongst the best in the industry. BRO outperforms 83.11% of its industry peers.
- BRO has a Quick Ratio of 1.18. This is a normal value and indicates that BRO is financially healthy and should not expect problems in meeting its short term obligations.
- With an excellent Quick ratio value of 1.18, BRO belongs to the best of the industry, outperforming 83.11% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.18 | ||
| Quick Ratio | 1.18 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 11.98% over the past year.
- The Earnings Per Share has been growing by 20.54% on average over the past years. This is a very strong growth
EPS 1Y (TTM)11.98%
EPS 3Y23.37%
EPS 5Y20.54%
EPS Q2Q%8.14%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%35.73%
3.2 Future
- The Earnings Per Share is expected to grow by 9.35% on average over the next years. This is quite good.
- The Revenue is expected to grow by 3.67% on average over the next years.
EPS Next Y8.72%
EPS Next 2Y9.35%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year22.96%
Revenue Next 2Y14.74%
Revenue Next 3Y2.71%
Revenue Next 5Y3.67%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 17.23, which indicates a rather expensive current valuation of BRO.
- 65.54% of the companies in the same industry are cheaper than BRO, based on the Price/Earnings ratio.
- The average S&P500 Price/Earnings ratio is at 27.25. BRO is valued slightly cheaper when compared to this.
- BRO is valuated correctly with a Price/Forward Earnings ratio of 15.85.
- Based on the Price/Forward Earnings ratio, BRO is valued a bit more expensive than 64.19% of the companies in the same industry.
- When comparing the Price/Forward Earnings ratio of BRO to the average of the S&P500 Index (25.98), we can say BRO is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.23 | ||
| Fwd PE | 15.85 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, BRO is valued a bit more expensive than 64.86% of the companies in the same industry.
- Based on the Price/Free Cash Flow ratio, BRO is valued a bit more expensive than 63.51% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.48 | ||
| EV/EBITDA | 17.86 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- BRO has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)1.98
PEG (5Y)0.84
EPS Next 2Y9.35%
EPS Next 3YN/A
5. Dividend
5.1 Amount
- With a yearly dividend of 0.83%, BRO is not a good candidate for dividend investing.
- BRO's Dividend Yield is slightly below the industry average, which is at 2.41.
- With a Dividend Yield of 0.83, BRO pays less dividend than the S&P500 average, which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.83% |
5.2 History
- On average, the dividend of BRO grows each year by 10.65%, which is quite nice.
- BRO has paid a dividend for at least 10 years, which is a reliable track record.
- BRO has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)10.65%
Div Incr Years31
Div Non Decr Years34
5.3 Sustainability
- BRO pays out 18.24% of its income as dividend. This is a sustainable payout ratio.
- BRO's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP18.24%
EPS Next 2Y9.35%
EPS Next 3YN/A
BROWN & BROWN INC / BRO FAQ
Can you provide the ChartMill fundamental rating for BROWN & BROWN INC?
ChartMill assigns a fundamental rating of 5 / 10 to BRO.
What is the valuation status for BRO stock?
ChartMill assigns a valuation rating of 2 / 10 to BROWN & BROWN INC (BRO). This can be considered as Overvalued.
What is the profitability of BRO stock?
BROWN & BROWN INC (BRO) has a profitability rating of 6 / 10.
What is the valuation of BROWN & BROWN INC based on its PE and PB ratios?
The Price/Earnings (PE) ratio for BROWN & BROWN INC (BRO) is 17.23 and the Price/Book (PB) ratio is 2.04.
How sustainable is the dividend of BROWN & BROWN INC (BRO) stock?
The dividend rating of BROWN & BROWN INC (BRO) is 5 / 10 and the dividend payout ratio is 18.24%.