NYSE:BRO

Stock Analysis Report

Executive Summary

Brown & Brown, Inc. markets and sells insurance products and services in the United States, England, Canada, Bermuda, and the Cayman Islands.

Rewards

Earnings are forecast to grow 8.3% per year

Earnings have grown 15.4% per year over the past 5 years

Risk Analysis

No risks detected for BRO from our risk checks.


Snowflake Analysis

Acceptable track record with concerning outlook.


Similar Companies

Share Price & News

How has Brown & Brown's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: BRO has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

1.1%

BRO

-1.5%

US Insurance

-1.1%

US Market


1 Year Return

63.9%

BRO

16.3%

US Insurance

17.9%

US Market

Return vs Industry: BRO exceeded the US Insurance industry which returned 16.3% over the past year.

Return vs Market: BRO exceeded the US Market which returned 17.9% over the past year.


Shareholder returns

BROIndustryMarket
7 Day1.1%-1.5%-1.1%
30 Day15.6%3.0%1.4%
90 Day27.4%5.2%6.9%
1 Year65.3%63.9%19.1%16.3%20.3%17.9%
3 Year130.0%122.8%34.4%24.0%47.8%38.3%
5 Year219.7%200.9%72.0%51.3%71.9%53.0%

Price Volatility Vs. Market

How volatile is Brown & Brown's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Brown & Brown undervalued compared to its fair value and its price relative to the market?

34.06x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: BRO ($48.36) is trading above our estimate of fair value ($37.8)

Significantly Below Fair Value: BRO is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: BRO is poor value based on its PE Ratio (34.1x) compared to the Insurance industry average (13.4x).

PE vs Market: BRO is poor value based on its PE Ratio (34.1x) compared to the US market (18.2x).


Price to Earnings Growth Ratio

PEG Ratio: BRO is poor value based on its PEG Ratio (4.1x)


Price to Book Ratio

PB vs Industry: BRO is overvalued based on its PB Ratio (4.1x) compared to the US Insurance industry average (1.1x).


Next Steps

Future Growth

How is Brown & Brown forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

8.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: BRO's forecast earnings growth (8.3% per year) is above the savings rate (1.7%).

Earnings vs Market: BRO's earnings (8.3% per year) are forecast to grow slower than the US market (14.1% per year).

High Growth Earnings: BRO's earnings are forecast to grow, but not significantly.

Revenue vs Market: BRO's revenue (7% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: BRO's revenue (7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: BRO's Return on Equity is forecast to be low in 3 years time (12.1%).


Next Steps

Past Performance

How has Brown & Brown performed over the past 5 years?

15.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: BRO has high quality earnings.

Growing Profit Margin: BRO's current net profit margins (16.7%) are lower than last year (17.1%).


Past Earnings Growth Analysis

Earnings Trend: BRO's earnings have grown by 15.4% per year over the past 5 years.

Accelerating Growth: BRO's earnings growth over the past year (15.8%) exceeds its 5-year average (15.4% per year).

Earnings vs Industry: BRO earnings growth over the past year (15.8%) underperformed the Insurance industry 32.1%.


Return on Equity

High ROE: BRO's Return on Equity (11.9%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Brown & Brown's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: BRO has a low level of unsold assets or inventory.

Debt Coverage by Assets: BRO's debt is covered by short term assets (assets are 1.6x debt).


Financial Institutions Analysis

Asset Level: BRO's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if BRO has a sufficient allowance for bad loans.

Low Risk Liabilities: BRO reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if BRO has an acceptable proportion of non-loan assets held.

Low Risk Deposits: BRO has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if BRO has an appropriate level of bad loans.


Next Steps

Dividend

What is Brown & Brown's current dividend yield, its reliability and sustainability?

0.70%

Current Dividend Yield


Dividend Yield vs Market

company0.7%marketbottom25%1.4%markettop25%3.7%industryaverage2.3%forecastin3Years0.8%

Current dividend yield vs market & industry

Notable Dividend: BRO's dividend (0.7%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.45%).

High Dividend: BRO's dividend (0.7%) is low compared to the top 25% of dividend payers in the US market (3.73%).


Stability and Growth of Payments

Stable Dividend: BRO is not paying a notable dividend for the US market, therefore no need to check if payments are stable.

Growing Dividend: BRO is not paying a notable dividend for the US market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: BRO is not paying a notable dividend for the US market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of BRO's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

8.3yrs

Average management tenure


CEO

J. Brown (51yo)

10.6yrs

Tenure

US$4,189,041

Compensation

Mr. J. Powell Brown, CPCU, has been the Chief Executive Officer of Brown & Brown Inc. since July 1, 2009 and has been its President since January 2007. Mr. Brown is responsible for all the operations of Br ...


CEO Compensation Analysis

Compensation vs Market: J.'s total compensation ($USD4.19M) is below average for companies of similar size in the US market ($USD10.81M).

Compensation vs Earnings: J.'s compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
J. Brown
CEO, President & Director10.6yrsUS$4.19m1.1% $149.5m
R. Watts
Executive VP5.9yrsUS$1.67m0.058% $7.9m
J. Penny
Executive VP & Chief Acquisitions Officer18.1yrsUS$1.71m0.24% $32.2m
Anthony Strianese
Executive VP & President of Wholesale Brokerage Division6.1yrsUS$1.89m0.099% $13.5m
Chris Walker
Executive VP & President of National Programs Division0yrsUS$1.81m0.058% $7.9m
Robert Lloyd
Executive VP11.1yrsno data0.042% $5.7m
Jenny Goco
Director of Communications0yrsno datano data
Julie Ryan
Executive VP & Chief People Officer3.1yrsno data0.0015% $208.4k
Richard Freebourn
Senior VP of Internal Operations5.4yrsno datano data
Sam Boone
Senior Vice President11.1yrsno datano data

8.3yrs

Average Tenure

54yo

Average Age

Experienced Management: BRO's management team is seasoned and experienced (8.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
J. Brown
CEO, President & Director10.6yrsUS$4.19m1.1% $149.5m
J. Brown
Chairman of the Board26.1yrsUS$208.85k14.56% $2.0b
Theodore Hoepner
Independent Director26.1yrsUS$149.98k0.039% $5.3m
Bradley Currey
Independent Director25.1yrsUS$149.98k0.18% $23.9m
Samuel Bell
Independent Director27.1yrsUS$149.98k0.026% $3.6m
Toni Jennings
Independent Director13.1yrsUS$159.98k0.016% $2.2m
Hugh Brown
Independent Director15.9yrsUS$149.98k0.016% $2.1m
Wendell Reilly
Lead Independent Director0yrsUS$155.98k0.011% $1.5m
James Hays
Vice Chairman1.3yrsUS$139.20k0.12% $16.3m
James Hunt
Independent Director6.8yrsUS$159.98k0.0057% $770.9k

15.9yrs

Average Tenure

73yo

Average Age

Experienced Board: BRO's board of directors are seasoned and experienced ( 15.9 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: BRO insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Brown & Brown, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Brown & Brown, Inc.
  • Ticker: BRO
  • Exchange: NYSE
  • Founded: 1939
  • Industry: Insurance Brokers
  • Sector: Insurance
  • Market Cap: US$13.621b
  • Shares outstanding: 281.66m
  • Website: https://www.bbinsurance.com

Number of Employees


Location

  • Brown & Brown, Inc.
  • 220 South Ridgewood Avenue
  • Daytona Beach
  • Florida
  • 32114
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
BRONYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1975
BTWDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1975

Biography

Brown & Brown, Inc. markets and sells insurance products and services in the United States, England, Canada, Bermuda, and the Cayman Islands. It operates through four segments: Retail, National Programs, Wholesale Brokerage, and Services. The Retail segment offers commercial packages, group medical, workers’ compensation, property risk, and general liability insurance products; and group and individual life, accident, disability, health, hospitalization, medical, dental, and other ancillary insurance products, as well as risk management, loss control survey and analysis, consultancy, and claims processing services. It serves commercial, public and quasi-public entities, professional, and individual customers. The National Programs segment offers professional liability and related package insurance products for dentists, oral surgeons, hygienists, lawyers, optometrists, opticians, ophthalmologists, insurance agents, financial advisors, registered representatives, securities broker-dealers, benefit administrators, real estate title agents, and escrow agents, as well as supplementary insurance products related to weddings, events, medical facilities, and cyber liabilities. This segment also offers outsourced product development, marketing, underwriting, actuarial, compliance, and claims and other administrative services to insurance carrier partners; and commercial and public entity-related programs, and flood insurance products. It serves through independent agents. The Wholesale Brokerage segment markets and sells excess and surplus commercial and personal lines insurance through independent agents and brokers. The Services segment offers third-party claims administration and medical utilization management services in the workers’ compensation and all-lines liability arenas, Medicare Set-aside, Social Security disability, Medicare benefits advocacy, and claims adjusting services. Brown & Brown, Inc. was founded in 1939 and is headquartered in Daytona Beach, Florida. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/23 00:29
End of Day Share Price2020/02/21 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.