BROWN & BROWN INC (BRO) Stock Fundamental Analysis
USA - NYSE:BRO - US1152361010 - Common Stock
90.92 USD
+0.04 (+0.04%)
90.92 USD
0 (0%)
Taking everything into account, BRO scores 5 out of 10 in our fundamental rating. BRO was compared to 146 industry peers in the Insurance industry. While BRO has a great profitability rating, there are some minor concerns on its financial health. 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.
BRO had a positive operating cash flow in the past year.
In the past 5 years BRO has always been profitable.
Each year in the past 5 years BRO had a positive operating cash flow.
1.2 Ratios
BRO has a Return On Assets of 3.87%. This is in the better half of the industry: BRO outperforms 78.08% of its industry peers.
BRO has a Return On Equity of 8.56%. This is comparable to the rest of the industry: BRO outperforms 43.15% of its industry peers.
The Return On Invested Capital of BRO (5.75%) is better than 85.62% of its industry peers.
The Average Return On Invested Capital over the past 3 years for BRO is above the industry average of 4.47%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.87% | ||
| ROE | 8.56% | ||
| ROIC | 5.75% |
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
The Profit Margin of BRO (19.63%) is better than 91.10% of its industry peers.
In the last couple of years the Profit Margin of BRO has grown nicely.
Looking at the Operating Margin, with a value of 30.31%, BRO belongs to the top of the industry, outperforming 97.26% 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 | 30.31% | ||
| PM (TTM) | 19.63% | ||
| 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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so BRO is still creating some value.
Compared to 1 year ago, BRO has more shares outstanding
BRO has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, BRO has an improved debt to assets ratio.
2.2 Solvency
BRO has an Altman-Z score of 2.47. 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.
Looking at the Altman-Z score, with a value of 2.47, BRO belongs to the top of the industry, outperforming 91.10% of the companies in the same industry.
The Debt to FCF ratio of BRO is 5.97, which is a neutral value as it means it would take BRO, 5.97 years of fcf income to pay off all of its debts.
BRO has a Debt to FCF ratio of 5.97. This is in the lower half of the industry: BRO underperforms 63.01% of its industry peers.
BRO has a Debt/Equity ratio of 0.64. This is a neutral value indicating BRO is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.64, BRO is doing worse than 81.51% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.64 | ||
| Debt/FCF | 5.97 | ||
| Altman-Z | 2.47 |
ROIC/WACC0.71
WACC8.14%
2.3 Liquidity
A Current Ratio of 2.75 indicates that BRO has no problem at all paying its short term obligations.
BRO has a Current ratio of 2.75. This is amongst the best in the industry. BRO outperforms 91.10% of its industry peers.
A Quick Ratio of 2.75 indicates that BRO has no problem at all paying its short term obligations.
BRO has a better Quick ratio (2.75) than 91.10% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.75 | ||
| Quick Ratio | 2.75 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 21.73% 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 22.36% on average per year.
BRO shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 11.66%.
Measured over the past years, BRO shows a quite strong growth in Revenue. The Revenue has been growing by 14.97% on average per year.
EPS 1Y (TTM)21.73%
EPS 3Y20.59%
EPS 5Y22.36%
EPS Q2Q%10.75%
Revenue 1Y (TTM)11.66%
Revenue growth 3Y16.34%
Revenue growth 5Y14.97%
Sales Q2Q%9.08%
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 11.51% yearly.
BRO is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.67% yearly.
EPS Next Y10.08%
EPS Next 2Y11.83%
EPS Next 3Y11.51%
EPS Next 5YN/A
Revenue Next Year23.63%
Revenue Next 2Y24.46%
Revenue Next 3Y18.61%
Revenue Next 5Y7.67%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
When comparing the Revenue 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
A Price/Earnings ratio of 22.23 indicates a rather expensive valuation of BRO.
BRO's Price/Earnings ratio is a bit more expensive when compared to the industry. BRO is more expensive than 72.60% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.20, BRO is valued at the same level.
The Price/Forward Earnings ratio is 18.93, which indicates a rather expensive current valuation of BRO.
Based on the Price/Forward Earnings ratio, BRO is valued a bit more expensive than 69.18% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.71, BRO is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.23 | ||
| Fwd PE | 18.93 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, BRO is valued a bit more expensive than the industry average as 60.27% of the companies are valued more cheaply.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of BRO indicates a slightly more expensive valuation: BRO is more expensive than 63.70% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.73 | ||
| EV/EBITDA | 16.14 |
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)2.2
PEG (5Y)0.99
EPS Next 2Y11.83%
EPS Next 3Y11.51%
5. Dividend
5.1 Amount
BRO has a yearly dividend return of 0.64%, which is pretty low.
Compared to an average industry Dividend Yield of 3.43, BRO is paying slightly less dividend.
With a Dividend Yield of 0.64, BRO pays less dividend than the S&P500 average, which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.64% |
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
16.62% 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.
DP16.62%
EPS Next 2Y11.83%
EPS Next 3Y11.51%
90.92
+0.04 (+0.04%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners69.37%
Inst Owner Change20.19%
Ins Owners13.55%
Ins Owner Change0.54%
Market Cap29.99B
Analysts70.48
Price Target112.13 (23.33%)
Short Float %2.3%
Short Ratio2.19
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.64% |
Yearly Dividend0.54
Dividend Growth(5Y)10.65%
DP16.62%
Div Incr Years31
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.47%
Min EPS beat(2)-2.08%
Max EPS beat(2)3.03%
EPS beat(4)3
Avg EPS beat(4)3.72%
Min EPS beat(4)-2.08%
Max EPS beat(4)11.02%
EPS beat(8)7
Avg EPS beat(8)6.11%
EPS beat(12)10
Avg EPS beat(12)4.48%
EPS beat(16)14
Avg EPS beat(16)4.72%
Revenue beat(2)0
Avg Revenue beat(2)-0.76%
Min Revenue beat(2)-0.99%
Max Revenue beat(2)-0.54%
Revenue beat(4)2
Avg Revenue beat(4)0.93%
Min Revenue beat(4)-0.99%
Max Revenue beat(4)4.5%
Revenue beat(8)6
Avg Revenue beat(8)1.66%
Revenue beat(12)8
Avg Revenue beat(12)1.45%
Revenue beat(16)12
Avg Revenue beat(16)1.4%
PT rev (1m)-1.19%
PT rev (3m)-7.11%
EPS NQ rev (1m)-0.18%
EPS NQ rev (3m)-3.92%
EPS NY rev (1m)0.52%
EPS NY rev (3m)0.27%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)19.66%
Revenue NY rev (1m)5.59%
Revenue NY rev (3m)12.81%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.23 | ||
| Fwd PE | 18.93 | ||
| P/S | 5.93 | ||
| P/FCF | 23.73 | ||
| P/OCF | 22.4 | ||
| P/B | 2.59 | ||
| P/tB | 22 | ||
| EV/EBITDA | 16.14 |
EPS(TTM)4.09
EY4.5%
EPS(NY)4.8
Fwd EY5.28%
FCF(TTM)3.83
FCFY4.21%
OCF(TTM)4.06
OCFY4.46%
SpS15.33
BVpS35.15
TBVpS4.13
PEG (NY)2.2
PEG (5Y)0.99
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.87% | ||
| ROE | 8.56% | ||
| ROCE | 7.52% | ||
| ROIC | 5.75% | ||
| ROICexc | 10.2% | ||
| ROICexgc | 93.36% | ||
| OM | 30.31% | ||
| PM (TTM) | 19.63% | ||
| GM | N/A | ||
| FCFM | 24.99% |
ROA(3y)5.35%
ROA(5y)5.42%
ROE(3y)14.98%
ROE(5y)14.21%
ROIC(3y)9.07%
ROIC(5y)8.85%
ROICexc(3y)9.73%
ROICexc(5y)9.73%
ROICexgc(3y)222.79%
ROICexgc(5y)196.94%
ROCE(3y)11.87%
ROCE(5y)11.58%
ROICexcg growth 3Y-5.47%
ROICexcg growth 5Y1.96%
ROICexc growth 3Y0.09%
ROICexc growth 5Y3.73%
OM growth 3Y2.76%
OM growth 5Y4.78%
PM growth 3Y2.76%
PM growth 5Y4.84%
GM growth 3YN/A
GM growth 5YN/A
F-Score4
Asset Turnover0.2
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.64 | ||
| Debt/FCF | 5.97 | ||
| Debt/EBITDA | 4.21 | ||
| Cap/Depr | 31.12% | ||
| Cap/Sales | 1.48% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 75.48% | ||
| Profit Quality | 127.29% | ||
| Current Ratio | 2.75 | ||
| Quick Ratio | 2.75 | ||
| Altman-Z | 2.47 |
F-Score4
WACC8.14%
ROIC/WACC0.71
Cap/Depr(3y)32.9%
Cap/Depr(5y)36.11%
Cap/Sales(3y)1.6%
Cap/Sales(5y)1.8%
Profit Quality(3y)115.6%
Profit Quality(5y)123.95%
High Growth Momentum
Growth
EPS 1Y (TTM)21.73%
EPS 3Y20.59%
EPS 5Y22.36%
EPS Q2Q%10.75%
EPS Next Y10.08%
EPS Next 2Y11.83%
EPS Next 3Y11.51%
EPS Next 5YN/A
Revenue 1Y (TTM)11.66%
Revenue growth 3Y16.34%
Revenue growth 5Y14.97%
Sales Q2Q%9.08%
Revenue Next Year23.63%
Revenue Next 2Y24.46%
Revenue Next 3Y18.61%
Revenue Next 5Y7.67%
EBIT growth 1Y13.14%
EBIT growth 3Y19.55%
EBIT growth 5Y20.47%
EBIT Next Year33.79%
EBIT Next 3Y22.98%
EBIT Next 5Y10.16%
FCF growth 1Y46.25%
FCF growth 3Y12.65%
FCF growth 5Y12.53%
OCF growth 1Y44.96%
OCF growth 3Y13.23%
OCF growth 5Y11.6%