Brown & Brown, Inc.’s ( BRO Quick Quote BRO - Free Report) strong performing segments, strategic buyouts to capitalize on growing markets opportunities, sturdy financial standing and effective capital deployment bode well for growth. These, along with favorable growth estimates, make it worth retaining in one’s portfolio. BRO is one of the largest insurance brokers whose total shareholder return has outperformed both its peer group and the S&P 500 in the last five years and has a solid track record of beating earnings estimates in the last 10 quarters. Optimistic Growth Projections
The Zacks Consensus Estimate for BRO’s 2022 earnings is pegged at $2.28, indicating a 4.1% increase from the year-ago reported figure on 14% higher revenues of $3.4 billion. The consensus estimate for 2023 earnings is pegged at $2.56, indicating a 12% increase from the year-ago reported figure on 12.6% higher revenues of $3.9 billion.
Zacks Rank & Price Performance
Brown & Brown currently carries a Zacks Rank #2 (Buy). In the past year, the stock has gained 8.6% against the
industry’s decrease of 4.2%. Image Source: Zacks Investment Research Business Tailwinds
Increasing commissions and fees across its segments should drive the top line for Brown and Brown, which witnessed a five-year annual growth rate of 11.6%. Improving new business, solid retention and continued rate increases for most lines of coverage should help retain the growth momentum.
Brown & Brown has an impressive inorganic story that helps strengthen its compelling products and service portfolio as well as expand its global reach. A solid capital position by virtue of sustained strong operational performance continues to aid BRO to make consistent investments in boosting organic growth and margin expansion. Solid Dividend History
Banking on strong capital and liquidity position, Brown & Brown has increased
dividends at a five-year (2015 – 2022) CAGR of 6.3%, with a current dividend yield of 0.7%. It has a solid track of hiking dividends for the last 28 years, making it an attractive pick for yield-seeking investors. Attractive Valuation
BRO stocks are trading at a discount to the industry average. Its price-to-book multiple of 3.77 is much lower than the industry average of 6.05. Before value expands, it is wise to take a position in the stock.
Stocks to Consider
Some better-ranked stocks in the insurance industry are
HCI Group ( HCI Quick Quote HCI - Free Report) , American Financial Group, Inc. ( AFG Quick Quote AFG - Free Report) and Ryan Specialty Group Holdings, Inc. ( RYAN Quick Quote RYAN - Free Report) . The Zacks Consensus Estimate for HCI Group’s 2022 and 2023 earnings has moved 33.3% and 40% north, respectively, in the past 60 days and indicates a year-over-year increase of 280.9% and 75%, respectively. HCI Group’s sports a Zacks Rank #1 (Strong Buy). You can see . the complete list of today’s Zacks #1 Rank stocks here The Zacks Consensus Estimate for American Financial’s 2022 and 2023 earnings has moved 9.8% and 6.9% north, respectively, in the past 60 days. American Financial’s earnings surpassed estimates in each of the last four quarters, the average beat being 41.72%. AFG sports a Zacks Rank #1. The Zacks Consensus Estimate for Ryan Specialty’s 2022 and 2023 earnings has moved 3.4% and 4.3% north in the past 60 days and indicates a 13% and 19.3% year-over-year increase, respectively. Ryan Specialty delivered a four-quarter average earnings surprise of 19.7%. Shares of HCI have lost 32.8% in a year’s time while that of AFG and RYAN have gained 10.3% and 38.7% respectively in the same time frame.