BROWN & BROWN INC (BRO) Stock Fundamental Analysis
NYSE:BRO - US1152361010 - Common Stock
96.66 USD
+0.26 (+0.27%)
96.66 USD
0 (0%)
Overall BRO gets a fundamental rating of 5 out of 10. We evaluated BRO against 143 industry peers in the Insurance industry. While BRO belongs to the best of the industry regarding profitability, 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.
In the past year BRO had a positive cash flow from operations.
Each year in the past 5 years BRO has been profitable.
Each year in the past 5 years BRO had a positive operating cash flow.
1.2 Ratios
BRO's Return On Assets of 3.87% is fine compared to the rest of the industry. BRO outperforms 78.32% of its industry peers.
BRO's Return On Equity of 8.56% is in line compared to the rest of the industry. BRO outperforms 43.36% of its industry peers.
BRO's Return On Invested Capital of 5.75% is amongst the best of the industry. BRO outperforms 86.71% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for BRO is above the industry average of 4.11%.
| 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
Looking at the Profit Margin, with a value of 19.63%, BRO belongs to the top of the industry, outperforming 90.91% of the companies in the same industry.
BRO's Profit Margin has improved in the last couple of years.
BRO's Operating Margin of 30.31% is amongst the best of the industry. BRO outperforms 97.20% of its industry peers.
In the last couple of years the Operating Margin of BRO has grown nicely.
| 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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), BRO is creating some value.
The number of shares outstanding for BRO has been increased compared to 1 year ago.
The number of shares outstanding for BRO has been increased compared to 5 years ago.
BRO has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.55 indicates that BRO is not a great score, but indicates only limited risk for bankruptcy at the moment.
BRO has a better Altman-Z score (2.55) than 93.01% of its industry peers.
BRO has a debt to FCF ratio of 5.97. This is a neutral value as BRO would need 5.97 years to pay back of all of its debts.
With a Debt to FCF ratio value of 5.97, BRO is not doing good in the industry: 64.34% of the companies in the same industry are doing better.
A Debt/Equity ratio of 0.64 indicates that BRO is somewhat dependend on debt financing.
BRO has a worse Debt to Equity ratio (0.64) than 81.12% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.64 | ||
| Debt/FCF | 5.97 | ||
| Altman-Z | 2.55 |
ROIC/WACC0.69
WACC8.36%
2.3 Liquidity
A Current Ratio of 2.75 indicates that BRO has no problem at all paying its short term obligations.
With an excellent Current ratio value of 2.75, BRO belongs to the best of the industry, outperforming 91.61% of the companies in the same industry.
BRO has a Quick Ratio of 2.75. This indicates that BRO is financially healthy and has no problem in meeting its short term obligations.
BRO has a Quick ratio of 2.75. This is amongst the best in the industry. BRO outperforms 91.61% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.75 | ||
| Quick Ratio | 2.75 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 21.73% over the past year.
The Earnings Per Share has been growing by 22.36% on average over the past years. This is a very strong growth
Looking at the last year, BRO shows a quite strong growth in Revenue. The Revenue has grown by 11.66% in the last year.
BRO shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 14.97% yearly.
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 11.51% 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 Y10.08%
EPS Next 2Y11.83%
EPS Next 3Y11.51%
EPS Next 5YN/A
Revenue Next Year23.61%
Revenue Next 2Y24.29%
Revenue Next 3Y18.23%
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
BRO is valuated rather expensively with a Price/Earnings ratio of 23.63.
73.43% of the companies in the same industry are cheaper than BRO, based on the Price/Earnings ratio.
BRO is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.24, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 20.13, the valuation of BRO can be described as rather expensive.
69.93% of the companies in the same industry are cheaper than BRO, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.81, BRO is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.63 | ||
| Fwd PE | 20.13 |
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.
Based on the Price/Free Cash Flow ratio, BRO is valued a bit more expensive than the industry average as 65.03% of the companies are valued more cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.22 | ||
| EV/EBITDA | 17.21 |
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)2.34
PEG (5Y)1.06
EPS Next 2Y11.83%
EPS Next 3Y11.51%
5. Dividend
5.1 Amount
BRO has a yearly dividend return of 0.62%, which is pretty low.
BRO's Dividend Yield is slightly below the industry average, which is at 3.52.
Compared to an average S&P500 Dividend Yield of 2.34, BRO's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.62% |
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
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 2Y11.83%
EPS Next 3Y11.51%
96.66
+0.26 (+0.27%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners69.37%
Inst Owner Change20.19%
Ins Owners13.55%
Ins Owner Change0.66%
Market Cap31.88B
Analysts70
Price Target112.13 (16%)
Short Float %2.25%
Short Ratio1.46
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.62% |
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)-7.89%
PT rev (3m)-7.85%
EPS NQ rev (1m)-1.64%
EPS NQ rev (3m)-5.18%
EPS NY rev (1m)0.52%
EPS NY rev (3m)0.27%
Revenue NQ rev (1m)14.22%
Revenue NQ rev (3m)19.75%
Revenue NY rev (1m)7.22%
Revenue NY rev (3m)12.96%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.63 | ||
| Fwd PE | 20.13 | ||
| P/S | 6.3 | ||
| P/FCF | 25.22 | ||
| P/OCF | 23.81 | ||
| P/B | 2.75 | ||
| P/tB | 23.39 | ||
| EV/EBITDA | 17.21 |
EPS(TTM)4.09
EY4.23%
EPS(NY)4.8
Fwd EY4.97%
FCF(TTM)3.83
FCFY3.96%
OCF(TTM)4.06
OCFY4.2%
SpS15.33
BVpS35.15
TBVpS4.13
PEG (NY)2.34
PEG (5Y)1.06
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 | 2.55 |
F-Score4
WACC8.36%
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 Y10.08%
EPS Next 2Y11.83%
EPS Next 3Y11.51%
EPS Next 5YN/A
Revenue 1Y (TTM)11.66%
Revenue growth 3Y16.34%
Revenue growth 5Y14.97%
Sales Q2Q%9.08%
Revenue Next Year23.61%
Revenue Next 2Y24.29%
Revenue Next 3Y18.23%
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%