BROWN & BROWN INC (BRO) Stock Fundamental Analysis
NYSE:BRO - New York Stock Exchange, Inc. - US1152361010 - Common Stock - Currency: USD
Taking everything into account, BRO scores 5 out of 10 in our fundamental rating. BRO was compared to 143 industry peers in the Insurance industry. BRO has an excellent profitability rating, but there are some minor concerns on its financial health. BRO is quite expensive at the moment. 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.
Each year in the past 5 years BRO has been profitable.
In the past 5 years BRO always reported a positive cash flow from operatings.
1.2 Ratios
BRO has a Return On Assets of 5.57%. This is amongst the best in the industry. BRO outperforms 86.01% of its industry peers.
The Return On Equity of BRO (15.28%) is better than 63.64% of its industry peers.
BRO has a Return On Invested Capital of 9.92%. This is amongst the best in the industry. BRO outperforms 95.10% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for BRO is above the industry average of 4.47%.
The 3 year average ROIC (9.07%) for BRO is below the current ROIC(9.92%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.57% | ||
| ROE | 15.28% | ||
| ROIC | 9.92% |
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 20.42% is amongst the best of the industry. BRO outperforms 90.21% of its industry peers.
BRO's Profit Margin has improved in the last couple of years.
The Operating Margin of BRO (30.51%) is better than 93.01% of its industry peers.
In the last couple of years the Operating Margin of BRO has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 30.51% | ||
| PM (TTM) | 20.42% | ||
| 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.
BRO has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, BRO has more shares outstanding
Compared to 1 year ago, BRO has an improved debt to assets ratio.
2.2 Solvency
BRO has an Altman-Z score of 2.89. 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.
With an excellent Altman-Z score value of 2.89, BRO belongs to the best of the industry, outperforming 93.71% of the companies in the same industry.
BRO has a debt to FCF ratio of 3.50. This is a good value and a sign of high solvency as BRO would need 3.50 years to pay back of all of its debts.
BRO has a worse Debt to FCF ratio (3.50) than 60.84% of its industry peers.
A Debt/Equity ratio of 0.56 indicates that BRO is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.56, BRO is not doing good in the industry: 73.43% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.56 | ||
| Debt/FCF | 3.5 | ||
| Altman-Z | 2.89 |
ROIC/WACC1.18
WACC8.43%
2.3 Liquidity
A Current Ratio of 1.10 indicates that BRO should not have too much problems paying its short term obligations.
BRO has a Current ratio of 1.10. This is in the better half of the industry: BRO outperforms 79.72% of its industry peers.
BRO has a Quick Ratio of 1.10. 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 better Quick ratio (1.10) than 79.72% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.1 | ||
| Quick Ratio | 1.1 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 36.65% over the past year.
BRO shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 22.36% yearly.
BRO shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 12.87%.
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)36.65%
EPS 3Y20.59%
EPS 5Y22.36%
EPS Q2Q%48.28%
Revenue 1Y (TTM)12.87%
Revenue growth 3Y16.34%
Revenue growth 5Y14.97%
Sales Q2Q%15.38%
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 10.21% yearly.
Based on estimates for the next years, BRO will show a small growth in Revenue. The Revenue will grow by 7.67% on average per year.
EPS Next Y10.57%
EPS Next 2Y9.76%
EPS Next 3Y10.21%
EPS Next 5YN/A
Revenue Next Year10.03%
Revenue Next 2Y9.19%
Revenue Next 3Y9.49%
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.
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
A Price/Earnings ratio of 29.80 indicates a quite expensive valuation of BRO.
BRO's Price/Earnings ratio is a bit more expensive when compared to the industry. BRO is more expensive than 74.83% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 28.79. BRO is around the same levels.
The Price/Forward Earnings ratio is 26.95, which means the current valuation is very expensive for BRO.
Based on the Price/Forward Earnings ratio, BRO is valued a bit more expensive than the industry average as 74.13% of the companies are valued more cheaply.
BRO's Price/Forward Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 21.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.8 | ||
| Fwd PE | 26.95 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, BRO is valued a bit more expensive than 62.24% of the companies in the same industry.
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 67.13% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.04 | ||
| EV/EBITDA | 21.85 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
BRO has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)2.82
PEG (5Y)1.33
EPS Next 2Y9.76%
EPS Next 3Y10.21%
5. Dividend
5.1 Amount
BRO has a yearly dividend return of 0.51%, which is pretty low.
BRO's Dividend Yield is slightly below the industry average, which is at 3.28.
With a Dividend Yield of 0.51, BRO pays less dividend than the S&P500 average, which is at 2.51.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.51% |
5.2 History
The dividend of BRO is nicely growing with an annual growth rate of 10.65%!
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
15.70% of the earnings are spent on dividend by BRO. This is a low number and sustainable payout ratio.
The dividend of BRO is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP15.7%
EPS Next 2Y9.76%
EPS Next 3Y10.21%
114.44
-3.32 (-2.82%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners76.91%
Inst Owner Change1.12%
Ins Owners16.37%
Ins Owner Change2.38%
Market Cap32.80B
Analysts70.48
Price Target118.29 (3.36%)
Short Float %2.34%
Short Ratio3.08
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.51% |
Yearly Dividend0.54
Dividend Growth(5Y)10.65%
DP15.7%
Div Incr Years31
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)6.97%
Min EPS beat(2)2.93%
Max EPS beat(2)11.02%
EPS beat(4)4
Avg EPS beat(4)6.54%
Min EPS beat(4)2.93%
Max EPS beat(4)11.02%
EPS beat(8)8
Avg EPS beat(8)7.86%
EPS beat(12)11
Avg EPS beat(12)4.87%
EPS beat(16)15
Avg EPS beat(16)7.21%
Revenue beat(2)2
Avg Revenue beat(2)2.63%
Min Revenue beat(2)0.76%
Max Revenue beat(2)4.5%
Revenue beat(4)4
Avg Revenue beat(4)2.38%
Min Revenue beat(4)0.76%
Max Revenue beat(4)4.5%
Revenue beat(8)8
Avg Revenue beat(8)2.8%
Revenue beat(12)10
Avg Revenue beat(12)1.93%
Revenue beat(16)14
Avg Revenue beat(16)2.26%
PT rev (1m)0%
PT rev (3m)0.62%
EPS NQ rev (1m)1.27%
EPS NQ rev (3m)5.66%
EPS NY rev (1m)0.4%
EPS NY rev (3m)2.6%
Revenue NQ rev (1m)0.14%
Revenue NQ rev (3m)2.6%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)1%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.8 | ||
| Fwd PE | 26.95 | ||
| P/S | 6.83 | ||
| P/FCF | 30.04 | ||
| P/OCF | 27.94 | ||
| P/B | 5.11 | ||
| P/tB | N/A | ||
| EV/EBITDA | 21.85 |
EPS(TTM)3.84
EY3.36%
EPS(NY)4.25
Fwd EY3.71%
FCF(TTM)3.81
FCFY3.33%
OCF(TTM)4.1
OCFY3.58%
SpS16.76
BVpS22.4
TBVpS-11.74
PEG (NY)2.82
PEG (5Y)1.33
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.57% | ||
| ROE | 15.28% | ||
| ROCE | 12.98% | ||
| ROIC | 9.92% | ||
| ROICexc | 10.56% | ||
| ROICexgc | 135.15% | ||
| OM | 30.51% | ||
| PM (TTM) | 20.42% | ||
| GM | N/A | ||
| FCFM | 22.73% |
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-Score7
Asset Turnover0.27
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.56 | ||
| Debt/FCF | 3.5 | ||
| Debt/EBITDA | 2.13 | ||
| Cap/Depr | 36.94% | ||
| Cap/Sales | 1.71% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 69.55% | ||
| Profit Quality | 111.32% | ||
| Current Ratio | 1.1 | ||
| Quick Ratio | 1.1 | ||
| Altman-Z | 2.89 |
F-Score7
WACC8.43%
ROIC/WACC1.18
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)36.65%
EPS 3Y20.59%
EPS 5Y22.36%
EPS Q2Q%48.28%
EPS Next Y10.57%
EPS Next 2Y9.76%
EPS Next 3Y10.21%
EPS Next 5YN/A
Revenue 1Y (TTM)12.87%
Revenue growth 3Y16.34%
Revenue growth 5Y14.97%
Sales Q2Q%15.38%
Revenue Next Year10.03%
Revenue Next 2Y9.19%
Revenue Next 3Y9.49%
Revenue Next 5Y7.67%
EBIT growth 1Y20.71%
EBIT growth 3Y19.55%
EBIT growth 5Y20.47%
EBIT Next Year20.3%
EBIT Next 3Y12.55%
EBIT Next 5Y10.16%
FCF growth 1Y16.1%
FCF growth 3Y12.65%
FCF growth 5Y12.53%
OCF growth 1Y16.3%
OCF growth 3Y13.23%
OCF growth 5Y11.6%