BROWN & BROWN INC (BRO) Stock Fundamental Analysis
NYSE:BRO - New York Stock Exchange, Inc. - US1152361010 - Common Stock - Currency: USD
Overall BRO gets a fundamental rating of 6 out of 10. We evaluated BRO against 144 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.
In the past year BRO had a positive cash flow from operations.
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
Looking at the Return On Assets, with a value of 6.08%, BRO belongs to the top of the industry, outperforming 90.97% of the companies in the same industry.
The Return On Equity of BRO (14.94%) is better than 72.92% of its industry peers.
BRO has a better Return On Invested Capital (9.85%) than 95.14% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for BRO is above the industry average of 4.07%.
The last Return On Invested Capital (9.85%) for BRO is above the 3 year average (9.07%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.08% | ||
| ROE | 14.94% | ||
| ROIC | 9.85% |
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 has a Profit Margin of 20.58%. This is amongst the best in the industry. BRO outperforms 88.89% 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 30.80%, BRO belongs to the best of the industry, outperforming 94.44% of the companies in the same industry.
BRO's Operating Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 30.8% | ||
| PM (TTM) | 20.58% | ||
| 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
An Altman-Z score of 3.07 indicates that BRO is not in any danger for bankruptcy at the moment.
The Altman-Z score of BRO (3.07) is better than 95.83% of its industry peers.
The Debt to FCF ratio of BRO is 2.95, which is a good value as it means it would take BRO, 2.95 years of fcf income to pay off all of its debts.
BRO has a Debt to FCF ratio (2.95) which is comparable to the rest of the industry.
A Debt/Equity ratio of 0.55 indicates that BRO is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.55, BRO is not doing good in the industry: 72.22% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.55 | ||
| Debt/FCF | 2.95 | ||
| Altman-Z | 3.07 |
ROIC/WACC1.06
WACC9.29%
2.3 Liquidity
A Current Ratio of 1.20 indicates that BRO should not have too much problems paying its short term obligations.
The Current ratio of BRO (1.20) is better than 84.03% of its industry peers.
BRO has a Quick Ratio of 1.20. 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 1.20, BRO belongs to the best of the industry, outperforming 84.03% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.2 | ||
| Quick Ratio | 1.2 |
3. Growth
3.1 Past
BRO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 28.30%, which is quite impressive.
BRO shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 22.36% yearly.
The Revenue has grown by 12.54% in the past year. This is quite good.
The Revenue has been growing by 14.97% on average over the past years. This is quite good.
EPS 1Y (TTM)28.3%
EPS 3Y20.59%
EPS 5Y22.36%
EPS Q2Q%13.16%
Revenue 1Y (TTM)12.54%
Revenue growth 3Y16.34%
Revenue growth 5Y14.97%
Sales Q2Q%11.61%
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 9.49% on average per year.
BRO is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.67% yearly.
EPS Next Y10.18%
EPS Next 2Y10.14%
EPS Next 3Y9.49%
EPS Next 5YN/A
Revenue Next Year10.74%
Revenue Next 2Y10.45%
Revenue Next 3Y9.83%
Revenue Next 5Y7.67%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last 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
Based on the Price/Earnings ratio of 27.02, the valuation of BRO can be described as expensive.
Based on the Price/Earnings ratio, BRO is valued a bit more expensive than the industry average as 75.00% of the companies are valued more cheaply.
BRO is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.28, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 23.14 indicates a rather expensive valuation of BRO.
Based on the Price/Forward Earnings ratio, BRO is valued a bit more expensive than 75.00% of the companies in the same industry.
BRO's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 21.76.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.02 | ||
| Fwd PE | 23.14 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, BRO is valued a bit more expensive than the industry average as 61.81% 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 68.06% of the companies are valued more cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.99 | ||
| EV/EBITDA | 19.37 |
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)2.65
PEG (5Y)1.21
EPS Next 2Y10.14%
EPS Next 3Y9.49%
5. Dividend
5.1 Amount
With a yearly dividend of 0.55%, BRO is not a good candidate for dividend investing.
BRO's Dividend Yield is slightly below the industry average, which is at 3.51.
Compared to an average S&P500 Dividend Yield of 2.42, BRO's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.55% |
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 15.60% 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.
DP15.6%
EPS Next 2Y10.14%
EPS Next 3Y9.49%
107.81
-1.12 (-1.03%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners79.64%
Inst Owner Change3.63%
Ins Owners15.6%
Ins Owner Change3.21%
Market Cap30.90B
Analysts70
Price Target121.31 (12.52%)
Short Float %2.79%
Short Ratio2.27
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.55% |
Yearly Dividend0.54
Dividend Growth(5Y)10.65%
DP15.6%
Div Incr Years31
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)4.47%
Min EPS beat(2)-2.08%
Max EPS beat(2)11.02%
EPS beat(4)3
Avg EPS beat(4)4.17%
Min EPS beat(4)-2.08%
Max EPS beat(4)11.02%
EPS beat(8)7
Avg EPS beat(8)7.38%
EPS beat(12)10
Avg EPS beat(12)4.5%
EPS beat(16)14
Avg EPS beat(16)5.81%
Revenue beat(2)1
Avg Revenue beat(2)1.76%
Min Revenue beat(2)-0.99%
Max Revenue beat(2)4.5%
Revenue beat(4)3
Avg Revenue beat(4)1.55%
Min Revenue beat(4)-0.99%
Max Revenue beat(4)4.5%
Revenue beat(8)7
Avg Revenue beat(8)2.23%
Revenue beat(12)9
Avg Revenue beat(12)1.8%
Revenue beat(16)13
Avg Revenue beat(16)1.77%
PT rev (1m)-0.32%
PT rev (3m)2.55%
EPS NQ rev (1m)-0.33%
EPS NQ rev (3m)-0.58%
EPS NY rev (1m)0.36%
EPS NY rev (3m)-0.11%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.31%
Revenue NY rev (1m)1.2%
Revenue NY rev (3m)0.66%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.02 | ||
| Fwd PE | 23.14 | ||
| P/S | 6.24 | ||
| P/FCF | 23.99 | ||
| P/OCF | 22.49 | ||
| P/B | 4.53 | ||
| P/tB | N/A | ||
| EV/EBITDA | 19.37 |
EPS(TTM)3.99
EY3.7%
EPS(NY)4.66
Fwd EY4.32%
FCF(TTM)4.49
FCFY4.17%
OCF(TTM)4.79
OCFY4.45%
SpS17.27
BVpS23.8
TBVpS-10.85
PEG (NY)2.65
PEG (5Y)1.21
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.08% | ||
| ROE | 14.94% | ||
| ROCE | 12.89% | ||
| ROIC | 9.85% | ||
| ROICexc | 10.44% | ||
| ROICexgc | 94.83% | ||
| OM | 30.8% | ||
| PM (TTM) | 20.58% | ||
| GM | N/A | ||
| FCFM | 26.01% |
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 Turnover0.3
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.55 | ||
| Debt/FCF | 2.95 | ||
| Debt/EBITDA | 2.12 | ||
| Cap/Depr | 37.07% | ||
| Cap/Sales | 1.74% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 78.2% | ||
| Profit Quality | 126.4% | ||
| Current Ratio | 1.2 | ||
| Quick Ratio | 1.2 | ||
| Altman-Z | 3.07 |
F-Score4
WACC9.29%
ROIC/WACC1.06
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)28.3%
EPS 3Y20.59%
EPS 5Y22.36%
EPS Q2Q%13.16%
EPS Next Y10.18%
EPS Next 2Y10.14%
EPS Next 3Y9.49%
EPS Next 5YN/A
Revenue 1Y (TTM)12.54%
Revenue growth 3Y16.34%
Revenue growth 5Y14.97%
Sales Q2Q%11.61%
Revenue Next Year10.74%
Revenue Next 2Y10.45%
Revenue Next 3Y9.83%
Revenue Next 5Y7.67%
EBIT growth 1Y17.89%
EBIT growth 3Y19.55%
EBIT growth 5Y20.47%
EBIT Next Year20.63%
EBIT Next 3Y11.94%
EBIT Next 5Y10.16%
FCF growth 1Y64.45%
FCF growth 3Y12.65%
FCF growth 5Y12.53%
OCF growth 1Y64.04%
OCF growth 3Y13.23%
OCF growth 5Y11.6%