BROWN & BROWN INC (BRO) Stock Fundamental Analysis
NYSE:BRO - New York Stock Exchange, Inc. - US1152361010 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to BRO. 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. 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.
Of the past 5 years BRO 4 years were 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 5.93%. This is amongst the best in the industry. BRO outperforms 85.31% of its industry peers.
With a decent Return On Equity value of 16.07%, BRO is doing good in the industry, outperforming 67.13% of the companies in the same industry.
The Return On Invested Capital of BRO (9.69%) is better than 93.01% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for BRO is above the industry average of 4.54%.
The last Return On Invested Capital (9.69%) for BRO is above the 3 year average (8.82%), which is a sign of increasing profitability.
| 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
Looking at the Profit Margin, with a value of 22.35%, BRO belongs to the top of the industry, outperforming 89.51% of the companies in the same industry.
In the last couple of years the Profit Margin of BRO has grown nicely.
BRO's Operating Margin of 30.03% is amongst the best of the industry. BRO outperforms 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 | 30.03% | ||
| PM (TTM) | 22.35% | ||
| GM | N/A |
OM growth 3Y3.31%
OM growth 5Y2.67%
PM growth 3Y4.19%
PM growth 5Y3.84%
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.
The number of shares outstanding for BRO has been increased compared to 1 year ago.
Compared to 5 years ago, BRO has more shares outstanding
BRO has a better debt/assets ratio than last year.
2.2 Solvency
BRO has an Altman-Z score of 2.92. 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.
BRO has a Altman-Z score of 2.92. This is amongst the best in the industry. BRO outperforms 95.10% 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 62.94% of the companies in the same industry.
BRO has a Debt/Equity ratio of 0.52. This is a neutral value indicating BRO is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.52, BRO is not doing good in the industry: 70.63% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.52 | ||
| Debt/FCF | 3.5 | ||
| Altman-Z | 2.92 |
ROIC/WACC1.16
WACC8.33%
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.
With an excellent Current ratio value of 1.15, BRO belongs to the best of the industry, outperforming 81.82% of the companies in the same industry.
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.
BRO has a better Quick ratio (1.15) than 81.82% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.15 | ||
| Quick Ratio | 1.15 |
3. Growth
3.1 Past
BRO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 36.65%, 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.
EPS 1Y (TTM)36.65%
EPS 3Y20.59%
EPS 5Y22.36%
EPS Q2Q%48.28%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%15.38%
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 10.02% on average per year.
The Revenue is expected to grow by 9.47% on average over the next years. This is quite good.
EPS Next Y10.14%
EPS Next 2Y9.38%
EPS Next 3Y10.02%
EPS Next 5YN/A
Revenue Next Year10.01%
Revenue Next 2Y9.17%
Revenue Next 3Y9.47%
Revenue Next 5YN/A
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 31.14, BRO can be considered very expensive at the moment.
76.92% of the companies in the same industry are cheaper than BRO, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 29.71, BRO is valued at the same level.
The Price/Forward Earnings ratio is 28.28, which means the current valuation is very expensive for BRO.
BRO's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. BRO is more expensive than 74.13% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.34, BRO is valued a bit more expensive.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.14 | ||
| Fwd PE | 28.28 |
4.2 Price Multiples
BRO's Enterprise Value to EBITDA is on the same level as the industry average.
BRO's Price/Free Cash Flow ratio is a bit more expensive when compared to the industry. BRO is more expensive than 69.23% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 33.34 | ||
| EV/EBITDA | 22.84 |
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 excellent profitability rating of BRO may justify a higher PE ratio.
PEG (NY)3.07
PEG (5Y)1.39
EPS Next 2Y9.38%
EPS Next 3Y10.02%
5. Dividend
5.1 Amount
With a yearly dividend of 0.52%, BRO is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 3.06, BRO is paying slightly less dividend.
Compared to an average S&P500 Dividend Yield of 2.30, BRO's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.52% |
5.2 History
On average, the dividend of BRO grows each year by 10.65%, 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)10.65%
Div Incr Years31
Div Non Decr Years34
5.3 Sustainability
14.26% 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.
DP14.26%
EPS Next 2Y9.38%
EPS Next 3Y10.02%
119.59
+0.42 (+0.35%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners76.91%
Inst Owner Change1.54%
Ins Owners16.37%
Ins Owner Change2.27%
Market Cap34.20B
Analysts71.43
Price Target118.29 (-1.09%)
Short Float %1.76%
Short Ratio2.78
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.52% |
Yearly Dividend0.54
Dividend Growth(5Y)10.65%
DP14.26%
Div Incr Years31
Div Non Decr Years34
Ex-Date
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)2.1%
PT rev (1m)1.23%
PT rev (3m)3.52%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.42%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.05%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)-0.02%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.14 | ||
| Fwd PE | 28.28 | ||
| P/S | 7.36 | ||
| P/FCF | 33.34 | ||
| P/OCF | 30.58 | ||
| P/B | 5.29 | ||
| P/tB | N/A | ||
| EV/EBITDA | 22.84 |
EPS(TTM)3.84
EY3.21%
EPS(NY)4.23
Fwd EY3.54%
FCF(TTM)3.59
FCFY3%
OCF(TTM)3.91
OCFY3.27%
SpS16.25
BVpS22.6
TBVpS-9.42
PEG (NY)3.07
PEG (5Y)1.39
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)9.37%
ROICexgc(3y)230.74%
ROICexgc(5y)194.15%
ROCE(3y)11.56%
ROCE(5y)11.05%
ROICexcg growth 3Y32.82%
ROICexcg growth 5Y3.05%
ROICexc growth 3Y4.03%
ROICexc growth 5Y3.1%
OM growth 3Y3.31%
OM growth 5Y2.67%
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 | 2.92 |
F-Score8
WACC8.33%
ROIC/WACC1.16
Cap/Depr(3y)30.4%
Cap/Depr(5y)40.09%
Cap/Sales(3y)1.52%
Cap/Sales(5y)2.07%
Profit Quality(3y)122.84%
Profit Quality(5y)133.06%
High Growth Momentum
Growth
EPS 1Y (TTM)36.65%
EPS 3Y20.59%
EPS 5Y22.36%
EPS Q2Q%48.28%
EPS Next Y10.14%
EPS Next 2Y9.38%
EPS Next 3Y10.02%
EPS Next 5YN/A
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%15.38%
Revenue Next Year10.01%
Revenue Next 2Y9.17%
Revenue Next 3Y9.47%
Revenue Next 5YN/A
EBIT growth 1Y17.93%
EBIT growth 3Y21.56%
EBIT growth 5Y19.24%
EBIT Next Year31.5%
EBIT Next 3Y15.3%
EBIT Next 5Y13.81%
FCF growth 1Y39.02%
FCF growth 3Y13.05%
FCF growth 5Y12.33%
OCF growth 1Y43.25%
OCF growth 3Y11.84%
OCF growth 5Y12.21%