BROWN & BROWN INC (BRO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:BRO - US1152361010 - Common Stock
79.18 USD
+0.56 (+0.71%)
79.05 USD
-0.13 (-0.16%)
Taking everything into account, BRO scores 5 out of 10 in our fundamental rating. BRO was compared to 149 industry peers in the Insurance industry. BRO has only an average score on both its financial health and profitability. BRO is valied quite expensively at the moment, while it does show a decent growth rate.
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.
- BRO had positive earnings in each of the past 5 years.
- In the past 5 years BRO always reported a positive cash flow from operatings.
1.2 Ratios
- Looking at the Return On Assets, with a value of 3.36%, BRO is in the better half of the industry, outperforming 68.46% of the companies in the same industry.
- The Return On Equity of BRO (7.97%) is worse than 66.44% of its industry peers.
- BRO's Return On Invested Capital of 5.43% is amongst the best of the industry. BRO outperforms 81.21% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for BRO is significantly below the industry average of 14.92%.
| 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 86.58% of the companies in the same industry.
- BRO's Profit Margin has improved in the last couple of years.
- BRO has a better Operating Margin (29.15%) than 91.28% of its industry peers.
- In the last couple of years the Operating Margin of BRO has grown nicely.
| 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
- With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), BRO is creating some value.
- Compared to 1 year ago, BRO has more shares outstanding
- Compared to 5 years ago, BRO has more shares outstanding
- BRO has a better debt/assets ratio than last year.
2.2 Solvency
- BRO has an Altman-Z score of 1.69. This is a bad value and indicates that BRO is not financially healthy and even has some risk of bankruptcy.
- BRO has a better Altman-Z score (1.69) than 87.92% of its industry peers.
- 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.
- The Debt to FCF ratio of BRO (5.95) is worse than 65.10% of its industry peers.
- BRO has a Debt/Equity ratio of 0.62. This is a neutral value indicating BRO is somewhat dependend on debt financing.
- The Debt to Equity ratio of BRO (0.62) is worse than 77.18% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.62 | ||
| Debt/FCF | 5.95 | ||
| Altman-Z | 1.69 |
ROIC/WACC0.66
WACC8.27%
2.3 Liquidity
- A Current Ratio of 1.18 indicates that BRO should not have too much problems paying its short term obligations.
- With an excellent Current ratio value of 1.18, BRO belongs to the best of the industry, outperforming 83.22% of the companies in the same industry.
- A Quick Ratio of 1.18 indicates that BRO should not have too much problems paying its short term obligations.
- The Quick ratio of BRO (1.18) is better than 83.22% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.18 | ||
| Quick Ratio | 1.18 |
3. Growth
3.1 Past
- BRO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 18.82%, which is quite good.
- The Earnings Per Share has been growing by 22.36% on average over the past years. This is a very strong growth
- Looking at the last year, BRO shows a quite strong growth in Revenue. The Revenue has grown by 17.85% in the last year.
- The Revenue has been growing by 14.97% on average over the past years. This is quite good.
EPS 1Y (TTM)18.82%
EPS 3Y20.59%
EPS 5Y22.36%
EPS Q2Q%15.38%
Revenue 1Y (TTM)17.85%
Revenue growth 3Y16.34%
Revenue growth 5Y14.97%
Sales Q2Q%35.41%
3.2 Future
- The Earnings Per Share is expected to grow by 10.69% on average over the next years. This is quite good.
- BRO is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.67% yearly.
EPS Next Y11.59%
EPS Next 2Y11.02%
EPS Next 3Y10.69%
EPS Next 5YN/A
Revenue Next Year25.3%
Revenue Next 2Y24.22%
Revenue Next 3Y18.2%
Revenue Next 5Y7.67%
3.3 Evolution
- Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
- The Revenue 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
- BRO is valuated rather expensively with a Price/Earnings ratio of 18.72.
- Based on the Price/Earnings ratio, BRO is valued a bit more expensive than 65.10% of the companies in the same industry.
- When comparing the Price/Earnings ratio of BRO to the average of the S&P500 Index (27.21), we can say BRO is valued slightly cheaper.
- With a Price/Forward Earnings ratio of 16.73, BRO is valued correctly.
- Based on the Price/Forward Earnings ratio, BRO is valued a bit more expensive than 63.09% of the companies in the same industry.
- When comparing the Price/Forward Earnings ratio of BRO to the average of the S&P500 Index (24.26), we can say BRO is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.72 | ||
| Fwd PE | 16.73 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, BRO is valued a bit more expensive than the industry average as 65.77% of the companies are valued more cheaply.
- Based on the Price/Free Cash Flow ratio, BRO is valued a bit more expensive than 63.76% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.81 | ||
| EV/EBITDA | 17.68 |
4.3 Compensation for Growth
- The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
- The decent profitability rating of BRO may justify a higher PE ratio.
PEG (NY)1.61
PEG (5Y)0.84
EPS Next 2Y11.02%
EPS Next 3Y10.69%
5. Dividend
5.1 Amount
- With a yearly dividend of 0.83%, BRO is not a good candidate for dividend investing.
- Compared to an average industry Dividend Yield of 2.53, 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 | 0.83% |
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 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
- 18.24% of the earnings are spent on dividend by BRO. This is a low number and sustainable payout ratio.
- The dividend of BRO is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP18.24%
EPS Next 2Y11.02%
EPS Next 3Y10.69%
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 18.72 and the Price/Book (PB) ratio is 2.18.
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%.