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 scores excellent on profitability, 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.
In the past 5 years BRO has always been profitable.
BRO had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
BRO's Return On Assets of 3.87% is fine compared to the rest of the industry. BRO outperforms 79.02% of its industry peers.
The Return On Equity of BRO (8.56%) is comparable to the rest of the industry.
The Return On Invested Capital of BRO (5.75%) is better than 87.41% of its industry peers.
BRO had an Average Return On Invested Capital over the past 3 years of 9.07%. This is significantly above the industry average of 4.00%.
| 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
BRO's Profit Margin of 19.63% is amongst the best of the industry. BRO outperforms 90.21% of its industry peers.
In the last couple of years the Profit Margin of BRO has grown nicely.
The Operating Margin of BRO (30.31%) is better than 96.50% of its industry peers.
BRO's Operating Margin has improved in the last couple of years.
| 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.
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 2.51. 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 better Altman-Z score (2.51) than 92.31% of its industry peers.
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 worse Debt to FCF ratio (5.97) than 64.34% 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.
With a Debt to Equity ratio value of 0.64, BRO is not doing good in the industry: 79.02% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.64 | ||
| Debt/FCF | 5.97 | ||
| Altman-Z | 2.51 |
ROIC/WACC0.69
WACC8.35%
2.3 Liquidity
A Current Ratio of 2.75 indicates that BRO has no problem at all paying its short term obligations.
Looking at the Current ratio, with a value of 2.75, BRO belongs to the top of the industry, outperforming 93.01% of the companies in the same industry.
A Quick Ratio of 2.75 indicates that BRO has no problem at all paying its short term obligations.
BRO's Quick ratio of 2.75 is amongst the best of the industry. BRO outperforms 93.01% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.75 | ||
| Quick Ratio | 2.75 |
3. Growth
3.1 Past
BRO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 21.73%, which is quite impressive.
The Earnings Per Share has been growing by 22.36% on average over the past years. This is a very strong growth
The Revenue has grown by 11.66% in the past year. This is quite good.
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
Based on estimates for the next years, BRO will show a quite strong growth in Earnings Per Share. The EPS will grow by 10.93% on average per year.
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 Y9.52%
EPS Next 2Y11.23%
EPS Next 3Y10.93%
EPS Next 5YN/A
Revenue Next Year17.08%
Revenue Next 2Y19.16%
Revenue Next 3Y15.71%
Revenue Next 5Y7.67%
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.
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 22.90 indicates a rather expensive valuation of BRO.
Based on the Price/Earnings ratio, BRO is valued a bit more expensive than 72.03% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.51, BRO is valued at the same level.
BRO is valuated rather expensively with a Price/Forward Earnings ratio of 19.71.
Based on the Price/Forward Earnings ratio, BRO is valued a bit more expensive than the industry average as 69.93% of the companies are valued more cheaply.
When comparing the Price/Forward Earnings ratio of BRO to the average of the S&P500 Index (34.09), we can say BRO is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.9 | ||
| Fwd PE | 19.71 |
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 60.84% of the companies listed in the same industry.
BRO's Price/Free Cash Flow ratio is a bit more expensive when compared to the industry. BRO is more expensive than 67.13% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.44 | ||
| EV/EBITDA | 16.65 |
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.
BRO has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)2.41
PEG (5Y)1.02
EPS Next 2Y11.23%
EPS Next 3Y10.93%
5. Dividend
5.1 Amount
With a yearly dividend of 0.65%, BRO is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 3.31, BRO is paying slightly less dividend.
Compared to an average S&P500 Dividend Yield of 2.40, BRO's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.65% |
5.2 History
The dividend of BRO is nicely growing with an annual growth rate of 10.65%!
BRO has been paying a dividend for at least 10 years, so it has a reliable track record.
BRO has not decreased their dividend for at least 10 years, which is a reliable track record.
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 2Y11.23%
EPS Next 3Y10.93%
93.65
+1.14 (+1.23%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners69.37%
Inst Owner Change-0.85%
Ins Owners13.55%
Ins Owner Change3.31%
Market Cap30.89B
Analysts70
Price Target113.49 (21.19%)
Short Float %1.88%
Short Ratio1.51
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.65% |
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)-6.45%
PT rev (3m)-6.74%
EPS NQ rev (1m)-2.67%
EPS NQ rev (3m)-6.37%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.96%
Revenue NQ rev (1m)7.49%
Revenue NQ rev (3m)12.02%
Revenue NY rev (1m)1.56%
Revenue NY rev (3m)6.93%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.9 | ||
| Fwd PE | 19.71 | ||
| P/S | 6.11 | ||
| P/FCF | 24.44 | ||
| P/OCF | 23.07 | ||
| P/B | 2.66 | ||
| P/tB | 22.66 | ||
| EV/EBITDA | 16.65 |
EPS(TTM)4.09
EY4.37%
EPS(NY)4.75
Fwd EY5.07%
FCF(TTM)3.83
FCFY4.09%
OCF(TTM)4.06
OCFY4.33%
SpS15.33
BVpS35.15
TBVpS4.13
PEG (NY)2.41
PEG (5Y)1.02
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 | 2.51 |
F-Score4
WACC8.35%
ROIC/WACC0.69
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 Y9.52%
EPS Next 2Y11.23%
EPS Next 3Y10.93%
EPS Next 5YN/A
Revenue 1Y (TTM)11.66%
Revenue growth 3Y16.34%
Revenue growth 5Y14.97%
Sales Q2Q%9.08%
Revenue Next Year17.08%
Revenue Next 2Y19.16%
Revenue Next 3Y15.71%
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%