BROWN & BROWN INC (BRO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:BRO - US1152361010 - Common Stock
72.1 USD
-2.02 (-2.73%)
72.81 USD
+0.71 (+0.98%)
BRO gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 148 industry peers in the Insurance industry. BRO has an average financial health and profitability rating. BRO is valued expensive and it does not seem to be growing.
1. Profitability
1.1 Basic Checks
- BRO had positive earnings in the past year.
- In the past year BRO had a positive cash flow from operations.
- Of the past 5 years BRO 4 years were profitable.
- BRO had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
- BRO has a better Return On Assets (3.36%) than 68.92% of its industry peers.
- With a Return On Equity value of 7.97%, BRO is not doing good in the industry: 66.22% of the companies in the same industry are doing better.
- BRO's Return On Invested Capital of 5.43% is amongst the best of the industry. BRO outperforms 81.76% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for BRO 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
- BRO has a better Profit Margin (18.02%) than 86.49% of its industry peers.
- BRO's Profit Margin has improved in the last couple of years.
- The Operating Margin of BRO (29.15%) is better than 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 1.61, 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 1.61, BRO belongs to the top of the industry, outperforming 87.16% 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.
- BRO has a Debt to FCF ratio of 5.95. This is in the lower half of the industry: BRO underperforms 64.86% of its industry peers.
- 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 | 1.61 |
ROIC/WACC0.66
WACC8.2%
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.
- The Current ratio of BRO (1.18) is better than 83.11% of its industry peers.
- A Quick Ratio of 1.18 indicates that BRO should not have too much problems paying its short term obligations.
- BRO has a Quick ratio of 1.18. This is amongst the best in the industry. BRO outperforms 83.11% of its industry peers.
| 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.
- Measured over the past years, BRO shows a very strong growth in Earnings Per Share. The EPS has been growing by 20.54% on average per year.
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
- The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- With a Price/Earnings ratio of 16.77, BRO is valued correctly.
- BRO's Price/Earnings ratio is a bit more expensive when compared to the industry. BRO is more expensive than 64.19% of the companies in the same industry.
- The average S&P500 Price/Earnings ratio is at 28.60. BRO is valued slightly cheaper when compared to this.
- A Price/Forward Earnings ratio of 15.42 indicates a correct valuation of BRO.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of BRO indicates a slightly more expensive valuation: BRO is more expensive than 62.84% of the companies listed in the same industry.
- The average S&P500 Price/Forward Earnings ratio is at 25.83. BRO is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.77 | ||
| Fwd PE | 15.42 |
4.2 Price Multiples
- BRO's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. BRO is more expensive than 63.51% of the companies in the same industry.
- Based on the Price/Free Cash Flow ratio, BRO is valued a bit more expensive than 62.84% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.95 | ||
| EV/EBITDA | 16.5 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates BRO does not grow enough to justify the current Price/Earnings ratio.
- The decent profitability rating of BRO may justify a higher PE ratio.
PEG (NY)1.92
PEG (5Y)0.82
EPS Next 2Y9.35%
EPS Next 3YN/A
5. Dividend
5.1 Amount
- With a yearly dividend of 0.89%, BRO is not a good candidate for dividend investing.
- Compared to an average industry Dividend Yield of 2.41, BRO is paying slightly less dividend.
- Compared to an average S&P500 Dividend Yield of 1.82, BRO's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.89% |
5.2 History
- On average, the dividend of BRO grows each year by 10.65%, which is quite nice.
- BRO has been paying a dividend for at least 10 years, so it has a reliable track record.
- BRO has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)10.65%
Div Incr Years31
Div Non Decr Years34
5.3 Sustainability
- 18.24% of the earnings are spent on dividend by BRO. This is a low number and 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 4 / 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 16.77 and the Price/Book (PB) ratio is 1.99.
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%.