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Why You Should Retain Brown and Brown (BRO) Stock For Now

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·3 min read
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Brown and Brown’s BRO solid segmental performance, strategic buyouts, and solid capital position along with favorable growth estimates make it worthy of retention in one’s portfolio.

The company has a solid earnings surprise history of beating estimates in each of the last seven reported quarters.

Zacks Rank & Price Performance

Brown and Brown currently carries a Zacks Rank #3 (Hold). Year to date, the stock has rallied 21.5%, outperforming the industry’s increase of 18.8%.

Zacks Investment Research
Zacks Investment Research

Image Source: Zacks Investment Research

Growth Projections

The Zacks Consensus Estimate for 2021 earnings is pegged at $2.08, indicating an upside of 24.6% from the year-ago reported figure on 15.2% higher revenues of $3 billion. The consensus estimate for 2022 earnings is pegged at $2.19, up 5.4% from the year-ago reported figure on 6.6% higher revenues of $3.2 billion.

The stock carries a favorable Growth Score of B. This style score analyzes the growth prospect of the company.

VGM Score

The company is well poised for progress, as is evident from its favorable VGM Score of B. Here V stands for Value, G for Growth and M for Momentum, with the score being a weighted combination of all three factors.

Business Tailwinds

Brown & Brown has been witnessing solid performance across all its segments, Revenues witnessed a 10-year CAGR of 10% and exceeded the peer average and the S&P 500.

Improving new business and continued rate increases for most lines of coverage should help retain the growth momentum. It estimates rate improvement to continue through 2021, given increased natural disasters and tort liability issues in the United States, among other factors.

The company remains focused on investing in strategic endeavors, boosting organic growth and margin expansion. It boasts industry-leading margins.

Brown & Brown has an impressive inorganic story, acquiring more than 500 insurance intermediary operations in more than two decades.

This insurance broker has been making investments in technological advancements to improve efficiency.

It boasts a solid cash position as well as low leverage. Its free cash flow witnessed a 10-year CAGR of 9%.

Solid Dividend History

The company has been hiking dividends for the last 27 years at a CAGR of 9.7%.

The company boasts five-year total shareholder returns of 205%, much above its peer group and the S&P 500.

Stocks to Consider

Some better-ranked stocks in the same space include American Financial Group AFG, Berkshire Hathaway (BRK.B), and Markel Corporation MKL, all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

American Financial Group delivered an earnings surprise of 45.73% in the last reported quarter.

Berkshire Hathaway delivered an earnings surprise of 16.67% in the last reported quarter.

Markel delivered an earnings surprise of 23.88% in the last reported quarter.




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American Financial Group, Inc. (AFG) : Free Stock Analysis Report

Brown & Brown, Inc. (BRO) : Free Stock Analysis Report

Markel Corporation (MKL) : Free Stock Analysis Report

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