BROWN & BROWN INC (BRO) Stock Fundamental Analysis
NYSE:BRO - New York Stock Exchange, Inc. - US1152361010 - Common Stock - Currency: USD
BRO gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals 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 valied quite expensively at the moment, while it does show a decent growth rate.
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.
In the past 5 years BRO always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 6.08%, BRO belongs to the top of the industry, outperforming 89.51% of the companies in the same industry.
BRO's Return On Equity of 14.94% is fine compared to the rest of the industry. BRO outperforms 61.54% of its industry peers.
BRO has a better Return On Invested Capital (9.85%) than 94.41% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for BRO is above the industry average of 4.47%.
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
The Profit Margin of BRO (20.58%) is better than 90.21% of its industry peers.
BRO's Profit Margin has improved in the last couple of years.
BRO's Operating Margin of 30.80% 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 | 30.8% | ||
| 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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), BRO is creating some value.
BRO has more shares outstanding than it did 1 year ago.
BRO has more shares outstanding than it did 5 years ago.
BRO has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 3.09 indicates that BRO is not in any danger for bankruptcy at the moment.
BRO has a better Altman-Z score (3.09) than 96.50% of its industry peers.
BRO has a debt to FCF ratio of 2.95. This is a good value and a sign of high solvency as BRO would need 2.95 years to pay back of all of its debts.
BRO has a Debt to FCF ratio (2.95) which is comparable to the rest of the industry.
BRO has a Debt/Equity ratio of 0.55. This is a neutral value indicating BRO is somewhat dependend on debt financing.
BRO has a Debt to Equity ratio of 0.55. This is in the lower half of the industry: BRO underperforms 68.53% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.55 | ||
| Debt/FCF | 2.95 | ||
| Altman-Z | 3.09 |
ROIC/WACC1.19
WACC8.29%
2.3 Liquidity
A Current Ratio of 1.20 indicates that BRO should not have too much problems paying its short term obligations.
BRO's Current ratio of 1.20 is amongst the best of the industry. BRO outperforms 82.52% of its industry peers.
A Quick Ratio of 1.20 indicates that BRO should not have too much problems paying its short term obligations.
BRO has a better Quick ratio (1.20) than 82.52% of its industry peers.
| 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.
BRO shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 12.54%.
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)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 10.21% 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 Y10.57%
EPS Next 2Y9.76%
EPS Next 3Y10.21%
EPS Next 5YN/A
Revenue Next Year10.14%
Revenue Next 2Y9.34%
Revenue Next 3Y9.54%
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 quite expensively with a Price/Earnings ratio of 27.32.
Based on the Price/Earnings ratio, BRO is valued a bit more expensive than the industry average as 75.52% of the companies are valued more cheaply.
BRO's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.75.
With a Price/Forward Earnings ratio of 23.57, BRO is valued on the expensive side.
Based on the Price/Forward Earnings ratio, BRO is valued a bit more expensive than 73.43% 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 20.49.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.32 | ||
| Fwd PE | 23.57 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, BRO is valued a bit more expensive than 62.94% of the companies 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 | 24.26 | ||
| EV/EBITDA | 19.57 |
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)2.58
PEG (5Y)1.22
EPS Next 2Y9.76%
EPS Next 3Y10.21%
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 3.23.
With a Dividend Yield of 0.55, BRO pays less dividend than the S&P500 average, which is at 2.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.55% |
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 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 2Y9.76%
EPS Next 3Y10.21%
109.02
-1.58 (-1.43%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners76.91%
Inst Owner Change0.87%
Ins Owners16.37%
Ins Owner Change2.38%
Market Cap31.25B
Analysts70
Price Target122.2 (12.09%)
Short Float %1.96%
Short Ratio2.5
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)3.3%
PT rev (3m)3.95%
EPS NQ rev (1m)1.15%
EPS NQ rev (3m)5.66%
EPS NY rev (1m)0.25%
EPS NY rev (3m)2.6%
Revenue NQ rev (1m)0.14%
Revenue NQ rev (3m)2.6%
Revenue NY rev (1m)0.11%
Revenue NY rev (3m)1.13%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.32 | ||
| Fwd PE | 23.57 | ||
| P/S | 6.31 | ||
| P/FCF | 24.26 | ||
| P/OCF | 22.74 | ||
| P/B | 4.58 | ||
| P/tB | N/A | ||
| EV/EBITDA | 19.57 |
EPS(TTM)3.99
EY3.66%
EPS(NY)4.63
Fwd EY4.24%
FCF(TTM)4.49
FCFY4.12%
OCF(TTM)4.79
OCFY4.4%
SpS17.27
BVpS23.8
TBVpS-10.85
PEG (NY)2.58
PEG (5Y)1.22
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 | 3.09 |
F-Score4
WACC8.29%
ROIC/WACC1.19
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 Y10.57%
EPS Next 2Y9.76%
EPS Next 3Y10.21%
EPS Next 5YN/A
Revenue 1Y (TTM)12.54%
Revenue growth 3Y16.34%
Revenue growth 5Y14.97%
Sales Q2Q%11.61%
Revenue Next Year10.14%
Revenue Next 2Y9.34%
Revenue Next 3Y9.54%
Revenue Next 5Y7.67%
EBIT growth 1Y17.89%
EBIT growth 3Y19.55%
EBIT growth 5Y20.47%
EBIT Next Year20.3%
EBIT Next 3Y12.55%
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%