BRO gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 147 industry peers in the Insurance industry. BRO has an average financial health and profitability rating. BRO does not seem to be growing, but still is valued expensively.

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

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.
BRO had a positive operating cash flow in 4 of the past 5 years.

1.2 Ratios

BRO has a Return On Assets of 3.36%. This is in the better half of the industry: BRO outperforms 68.92% of its industry peers.
BRO's Return On Equity of 7.97% is on the low side compared to the rest of the industry. BRO is outperformed by 66.22% of its industry peers.
BRO's Return On Invested Capital of 5.43% is amongst the best of the industry. BRO outperforms 81.76% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for BRO 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

The Profit Margin of BRO (18.02%) is better than 86.49% of its industry peers.
In the last couple of years the Profit Margin of BRO has grown nicely.
BRO has a better Operating Margin (29.15%) than 91.22% of its industry peers.
BRO's Operating Margin has improved in the last couple of years.

		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

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ROA

ROE

ROIC

Operating and Profit Margin

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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.
There is no outstanding debt for BRO. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.

2.2 Solvency

BRO has an Altman-Z score of 1.61. This is a bad value and indicates that BRO is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of BRO (1.61) is better than 87.16% 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.
BRO has a Debt to FCF ratio of 5.95. This is in the lower half of the industry: BRO underperforms 64.86% of its industry peers.
A Debt/Equity ratio of 0.62 indicates that BRO is somewhat dependend on debt financing.
BRO has a worse Debt to Equity ratio (0.62) than 77.70% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.62
Debt/FCF	5.95
Altman-Z	1.61

ROIC/WACC0.66

WACC8.22%

2.3 Liquidity

A Current Ratio of 1.18 indicates that BRO should not have too much problems paying 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.
The Quick ratio of BRO (1.18) is better than 83.11% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	1.18
Quick Ratio	1.18

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has grown by an nice 11.98% over the past year.
The Earnings Per Share has been growing by 20.54% on average over the past years. This is a very strong growth

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.
Based on estimates for the next years, BRO will show a small growth in Revenue. The Revenue will grow by 3.67% on average per year.

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

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.

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4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 16.77, which indicates a correct valuation of BRO.
BRO's Price/Earnings ratio is a bit more expensive when compared to the industry. BRO is more expensive than 62.84% of the companies in the same industry.
BRO's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 28.32.
BRO is valuated correctly with a Price/Forward Earnings ratio of 15.42.
Based on the Price/Forward Earnings ratio, BRO is valued a bit more expensive than 62.84% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of BRO to the average of the S&P500 Index (25.57), we can say BRO is valued slightly cheaper.

		Industry Rank	Sector Rank
PE	16.77
Fwd PE	15.42

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of BRO indicates a slightly more expensive valuation: BRO is more expensive than 63.51% of the companies listed 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 61.49% of the companies listed in the same industry.

		Industry Rank	Sector Rank
P/FCF	18.95
EV/EBITDA	16.5

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates BRO does not grow enough to justify the current Price/Earnings ratio.
The decent profitability rating of BRO may justify a higher PE ratio.

PEG (NY)1.92

PEG (5Y)0.82

EPS Next 2Y9.35%

EPS Next 3YN/A

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5. Dividend

5.1 Amount

With a yearly dividend of 0.92%, BRO is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 2.19, BRO is paying slightly less dividend.
With a Dividend Yield of 0.92, BRO pays less dividend than the S&P500 average, which is at 1.83.

		Industry Rank	Sector Rank
Dividend Yield	0.92%

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

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

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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 16.77 and the Price/Book (PB) ratio is 1.99.

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%.