BROWN & BROWN INC (BRO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:BRO - US1152361010 - Common Stock
74.12 USD
-5.5 (-6.91%)
74.12 USD
0 (0%)
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
- In the past year BRO was profitable.
- BRO had a positive operating cash flow in the past year.
- 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.
- 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.
- With an excellent Return On Invested Capital value of 5.43%, BRO belongs to the best of the industry, outperforming 81.76% of the companies in the same industry.
- 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
- BRO's Profit Margin of 18.02% is amongst the best of the industry. BRO outperforms 86.49% of its industry peers.
- In the last couple of years the Profit Margin of BRO has grown nicely.
- With an excellent Operating Margin value of 29.15%, BRO belongs to the best of the industry, outperforming 91.22% of the companies in the same industry.
- 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.
- BRO has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the 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.
- The Altman-Z score of BRO (1.70) is better than 88.51% 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.
- Looking at the Debt to FCF ratio, with a value of 5.95, BRO is doing worse than 64.86% of the companies in the same industry.
- A Debt/Equity ratio of 0.62 indicates that BRO is somewhat dependend on debt financing.
- BRO has a Debt to Equity ratio of 0.62. This is in the lower half of the industry: BRO underperforms 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
WACC8.2%
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.
- BRO has a Current ratio of 1.18. This is amongst the best in the industry. BRO outperforms 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's Quick ratio of 1.18 is amongst the best of 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
- BRO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 11.98%, which is quite good.
- 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
- Based on estimates for the next years, BRO will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.35% on average per year.
- BRO is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.67% yearly.
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
- The Price/Earnings ratio is 17.24, 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.
- BRO is valuated rather cheaply when we compare the Price/Earnings ratio to 28.87, which is the current average of the S&P500 Index.
- 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.
- Compared to an average S&P500 Price/Forward Earnings ratio of 25.96, BRO is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.24 | ||
| Fwd PE | 15.85 |
4.2 Price Multiples
- 64.86% of the companies in the same industry are cheaper than BRO, based on the Enterprise Value to EBITDA ratio.
- 63.51% of the companies in the same industry are cheaper than BRO, based on the Price/Free Cash Flow ratio.
| 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.
- The decent profitability rating of BRO 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.
- Compared to an average industry Dividend Yield of 2.41, BRO is paying slightly less dividend.
- 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 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
- BRO pays out 18.24% of its income as dividend. This is a sustainable payout ratio.
- The dividend of BRO is growing, but the earnings are growing slower. 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 17.24 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%.