Brown & Brown Enters ASR Program Worth $100 Million - Analyst Blog
Brown & Brown Inc. BRO recently announced that it has entered into an accelerated share repurchase program (ASR) with JPMorgan Chase Bank and National Association. The share repurchase amount will be up to $100 million.
This ASR is a part of the earlier announced share repurchase program of $200 million, which had been approved by Brown & Brown’s board of directors on Jul 21, 2014. In Sep 2014, the board of directors announced an ASR of $50 million under the above-mentioned buyback program. After this share repurchase, the company will be left with $50 million to be repurchased under the July authorization.
Brown & Brown repurchased 2.4 million shares in 2014. The company’s solid liquidity position aided its share buybacks. The company had cash and cash equivalents of $470 million (up 132% from 2013-end) and retained earnings of $1.8 billion (up 9.1% from 2013-end) as of Dec 31, 2014.
The company’s consistent efforts to reduce share count are expected to bolster earnings per share (EPS) in the upcoming period. This initiative not only retains investors’ confidence in the stock but attracts new investors as well.
On the earnings front, in Jan 2014, Brown & Brown’s adjusted EPS of 18 cents outperformed the Zacks Consensus Estimate of 13 cents by 38.5% on increased revenues in fourth-quarter 2014. Total revenue also increased 14.6% year over year to $393.1 million, driven by a rise in commissions and fees as well as investment income. Results were in line with the Zacks Consensus Estimate.
Currently, Brown & Brown carries a Zacks Rank #3 (Hold).
Other Stocks to Consider
Better-ranked stocks in the insurance sector include Allied World Assurance Company Holdings, AG AWH, Fidelity National Financial, Inc. FNF and Endurance Specialty Holdings Ltd. ENH. All of the stocks sport a Zacks Rank #1 (Strong Buy).
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