BROWN & BROWN INC (BRO) Stock Fundamental Analysis
NYSE:BRO - New York Stock Exchange, Inc. - US1152361010 - Common Stock
We assign a fundamental rating of 6 out of 10 to BRO. BRO was compared to 143 industry peers in the Insurance industry. BRO scores excellent on profitability, but there are some minor concerns on its financial health. While showing a medium growth rate, BRO is valued expensive at the moment.
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.
Each year in the past 5 years BRO has been profitable.
BRO had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
BRO has a better Return On Assets (5.93%) than 82.98% of its industry peers.
BRO has a better Return On Equity (16.07%) than 66.67% of its industry peers.
The Return On Invested Capital of BRO (9.69%) is better than 92.91% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for BRO is above the industry average of 4.61%.
The 3 year average ROIC (8.82%) for BRO is below the current ROIC(9.69%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.93% | ||
| ROE | 16.07% | ||
| ROIC | 9.69% |
ROA(3y)5.45%
ROA(5y)5.32%
ROE(3y)14.45%
ROE(5y)13.45%
ROIC(3y)8.82%
ROIC(5y)8.43%
1.3 Margins
With an excellent Profit Margin value of 22.35%, BRO belongs to the best of the industry, outperforming 87.23% of the companies in the same industry.
In the last couple of years the Profit Margin of BRO has grown nicely.
The Operating Margin of BRO (30.03%) is better than 92.20% of its industry peers.
BRO's Operating Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 30.03% | ||
| PM (TTM) | 22.35% | ||
| GM | N/A |
OM growth 3Y3.31%
OM growth 5Y2.66%
PM growth 3Y4.19%
PM growth 5Y3.84%
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.
Compared to 1 year ago, BRO has more shares outstanding
BRO has more shares outstanding than it did 5 years ago.
BRO has a better debt/assets ratio than last year.
2.2 Solvency
BRO has an Altman-Z score of 2.71. This is not the best score and indicates that BRO is in the grey zone with still only limited risk for bankruptcy at the moment.
The Altman-Z score of BRO (2.71) is better than 93.62% of its industry peers.
The Debt to FCF ratio of BRO is 3.50, which is a good value as it means it would take BRO, 3.50 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 3.50, BRO is doing worse than 62.41% of the companies in the same industry.
A Debt/Equity ratio of 0.52 indicates that BRO is somewhat dependend on debt financing.
BRO has a worse Debt to Equity ratio (0.52) than 70.92% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.52 | ||
| Debt/FCF | 3.5 | ||
| Altman-Z | 2.71 |
ROIC/WACC1.12
WACC8.62%
2.3 Liquidity
BRO has a Current Ratio of 1.15. 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 1.15. This is amongst the best in the industry. BRO outperforms 82.27% of its industry peers.
BRO has a Quick Ratio of 1.15. 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 1.15, BRO belongs to the best of the industry, outperforming 82.27% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.15 | ||
| Quick Ratio | 1.15 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 30.40% over the past year.
Measured over the past years, BRO shows a quite strong growth in Earnings Per Share. The EPS has been growing by 17.97% on average per year.
Looking at the last year, BRO shows a quite strong growth in Revenue. The Revenue has grown by 12.48% in the last year.
BRO shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 16.15% yearly.
EPS 1Y (TTM)30.4%
EPS 3Y18.47%
EPS 5Y17.97%
EPS Q2Q%28.17%
Revenue 1Y (TTM)12.48%
Revenue growth 3Y17.66%
Revenue growth 5Y16.15%
Sales Q2Q%11.08%
3.2 Future
BRO is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 17.06% yearly.
Based on estimates for the next years, BRO will show a quite strong growth in Revenue. The Revenue will grow by 9.86% on average per year.
EPS Next Y34.8%
EPS Next 2Y21.36%
EPS Next 3Y17.06%
EPS Next 5YN/A
Revenue Next Year12.75%
Revenue Next 2Y10.83%
Revenue Next 3Y9.86%
Revenue Next 5YN/A
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 stable.
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 quite expensively with a Price/Earnings ratio of 29.61.
Based on the Price/Earnings ratio, BRO is valued a bit more expensive than 75.89% of the companies in the same industry.
BRO's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 28.29.
Based on the Price/Forward Earnings ratio of 25.47, the valuation of BRO can be described as expensive.
Based on the Price/Forward Earnings ratio, BRO is valued a bit more expensive than the industry average as 73.76% of the companies are valued more cheaply.
Compared to an average S&P500 Price/Forward Earnings ratio of 24.44, BRO is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.61 | ||
| Fwd PE | 25.47 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, BRO is valued a bit more expensive than the industry average as 61.70% of the companies are valued more cheaply.
Based on the Price/Free Cash Flow ratio, BRO is valued a bit more expensive than the industry average as 68.79% of the companies are valued more cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.38 | ||
| EV/EBITDA | 20.37 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of BRO may justify a higher PE ratio.
A more expensive valuation may be justified as BRO's earnings are expected to grow with 17.06% in the coming years.
PEG (NY)0.85
PEG (5Y)1.65
EPS Next 2Y21.36%
EPS Next 3Y17.06%
5. Dividend
5.1 Amount
BRO has a yearly dividend return of 0.57%, which is pretty low.
BRO's Dividend Yield is slightly below the industry average, which is at 2.99.
With a Dividend Yield of 0.57, BRO pays less dividend than the S&P500 average, which is at 2.28.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.57% |
5.2 History
On average, the dividend of BRO grows each year by 9.32%, 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)9.32%
Div Incr Years31
Div Non Decr Years34
5.3 Sustainability
BRO pays out 14.26% of its income as dividend. This is a sustainable payout ratio.
BRO's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP14.26%
EPS Next 2Y21.36%
EPS Next 3Y17.06%
BROWN & BROWN INC
NYSE:BRO (1/22/2025, 11:36:43 AM)
105.41
-0.28 (-0.26%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners75.59%
Inst Owner Change-0.19%
Ins Owners16.44%
Ins Owner Change-0.46%
Market Cap30.14B
Analysts72.38
Price Target117.56 (11.53%)
Short Float %2.01%
Short Ratio3.91
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.57% |
Yearly Dividend0.48
Dividend Growth(5Y)9.32%
DP14.26%
Div Incr Years31
Div Non Decr Years34
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)3.88%
Min EPS beat(2)2.93%
Max EPS beat(2)4.82%
EPS beat(4)4
Avg EPS beat(4)5.81%
Min EPS beat(4)2.93%
Max EPS beat(4)8.12%
EPS beat(8)8
Avg EPS beat(8)7.51%
EPS beat(12)11
Avg EPS beat(12)4.56%
EPS beat(16)15
Avg EPS beat(16)7.03%
Revenue beat(2)2
Avg Revenue beat(2)1.33%
Min Revenue beat(2)0.76%
Max Revenue beat(2)1.9%
Revenue beat(4)4
Avg Revenue beat(4)2.03%
Min Revenue beat(4)0.76%
Max Revenue beat(4)3.1%
Revenue beat(8)7
Avg Revenue beat(8)2.18%
Revenue beat(12)10
Avg Revenue beat(12)1.61%
Revenue beat(16)14
Avg Revenue beat(16)2.11%
PT rev (1m)2.04%
PT rev (3m)9.34%
EPS NQ rev (1m)0%
EPS NQ rev (3m)3.12%
EPS NY rev (1m)0%
EPS NY rev (3m)1.21%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.61%
Revenue NY rev (1m)0.04%
Revenue NY rev (3m)0.86%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.61 | ||
| Fwd PE | 25.47 | ||
| P/S | 6.48 | ||
| P/FCF | 29.38 | ||
| P/OCF | 26.95 | ||
| P/B | 4.66 | ||
| P/tB | N/A | ||
| EV/EBITDA | 20.37 |
EPS(TTM)3.56
EY3.38%
EPS(NY)4.14
Fwd EY3.93%
FCF(TTM)3.59
FCFY3.4%
OCF(TTM)3.91
OCFY3.71%
SpS16.25
BVpS22.6
TBVpS-9.42
PEG (NY)0.85
PEG (5Y)1.65
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.93% | ||
| ROE | 16.07% | ||
| ROCE | 12.69% | ||
| ROIC | 9.69% | ||
| ROICexc | 10.62% | ||
| ROICexgc | 122.04% | ||
| OM | 30.03% | ||
| PM (TTM) | 22.35% | ||
| GM | N/A | ||
| FCFM | 22.07% |
ROA(3y)5.45%
ROA(5y)5.32%
ROE(3y)14.45%
ROE(5y)13.45%
ROIC(3y)8.82%
ROIC(5y)8.43%
ROICexc(3y)9.7%
ROICexc(5y)9.36%
ROICexgc(3y)230.66%
ROICexgc(5y)194.03%
ROCE(3y)11.56%
ROCE(5y)11.05%
ROICexcg growth 3Y32.85%
ROICexcg growth 5Y3.01%
ROICexc growth 3Y4.04%
ROICexc growth 5Y3.1%
OM growth 3Y3.31%
OM growth 5Y2.66%
PM growth 3Y4.19%
PM growth 5Y3.84%
GM growth 3YN/A
GM growth 5YN/A
F-Score8
Asset Turnover0.27
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.52 | ||
| Debt/FCF | 3.5 | ||
| Debt/EBITDA | 2.09 | ||
| Cap/Depr | 42.86% | ||
| Cap/Sales | 1.99% | ||
| Interest Coverage | 7.7 | ||
| Cash Conversion | 69.39% | ||
| Profit Quality | 98.76% | ||
| Current Ratio | 1.15 | ||
| Quick Ratio | 1.15 | ||
| Altman-Z | 2.71 |
F-Score8
WACC8.62%
ROIC/WACC1.12
Cap/Depr(3y)30.4%
Cap/Depr(5y)40.09%
Cap/Sales(3y)1.52%
Cap/Sales(5y)2.07%
Profit Quality(3y)122.83%
Profit Quality(5y)133.06%
High Growth Momentum
Growth
EPS 1Y (TTM)30.4%
EPS 3Y18.47%
EPS 5Y17.97%
EPS Q2Q%28.17%
EPS Next Y34.8%
EPS Next 2Y21.36%
EPS Next 3Y17.06%
EPS Next 5YN/A
Revenue 1Y (TTM)12.48%
Revenue growth 3Y17.66%
Revenue growth 5Y16.15%
Sales Q2Q%11.08%
Revenue Next Year12.75%
Revenue Next 2Y10.83%
Revenue Next 3Y9.86%
Revenue Next 5YN/A
EBIT growth 1Y17.93%
EBIT growth 3Y21.56%
EBIT growth 5Y19.24%
EBIT Next Year31.5%
EBIT Next 3Y15.54%
EBIT Next 5YN/A
FCF growth 1Y39.01%
FCF growth 3Y13.06%
FCF growth 5Y12.33%
OCF growth 1Y43.24%
OCF growth 3Y11.84%
OCF growth 5Y12.21%