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Here's Why Investors Should Bet on Brown & Brown (BRO) Now
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Brown & Brown, Inc. (BRO - Free Report) is poised to benefit from its new businesses, improved customer retention, premium rate increases across the majority of business lines, strategic acquisitions and a strong financial position.
BRO has a decent history of delivering earnings surprises in each of the last four reported quarters.
Zacks Rank and Price Performance
Brown & Brown presently carries a Zacks Rank #2 (Buy). Shares of the company have gained 18.3% over the past year compared with the industry’s growth of 7.5%.
Image Source: Zacks Investment Research
Rising Estimates
The Zacks Consensus Estimate for BRO’s 2024 earnings per share is pegged at $3.03, indicating a year-over-year increase of 9.7% on 8.1% higher revenues of $4.55 billion.
Business Tailwinds
Brown and Brown’s commissions and fees should continue to benefit from increasing new businesses, strong retention and continued rate increases for most lines of coverage. This, in turn, should drive the top line. The top line witnessed a five-year annual growth rate of 14%.
The insurance broker intends to make consistent investments in boosting organic growth and margin expansion. BRO expects its diversification and solid underwriting results to help it retain its business and expand its capacity in the future.
Brown & Brown boasts an impressive inorganic story that helps strengthen its compelling products and service portfolio, expand global reach and accelerate the growth rate. Strategic buyouts also help BRO to capitalize on growing market opportunities. The company completed seven acquisitions, which are expected to generate annual revenues of $14 million. The acquisition of Kentro Capital was completed in October 2023 and is expected to add specialty capabilities and consolidate its presence in London.
Backed by a sustained operational performance, Brown & Brown maintained a strong liquidity position. BRO has a strong cash conversion due to the strength of its operating model and diversity of businesses. Moreover, the company reduced its outstanding debt in the third quarter by making payments of $100 million.
The consensus estimate for 2024 earnings has moved 0.3% north in the past 30 days, reflecting analysts’ optimism.
Impressive Dividend History
A solid capital position supported BRO in increasing dividends over the last 29 years. Dividends witnessed a five-year (2019-2023) CAGR of 10.2%, making it an attractive pick for yield-seeking investors.
Reinsurance Group beat estimates in three of the last four quarters and missed in one, the average being 18.81%. In the past year, shares of RGA have gained 15.5%.
The Zacks Consensus Estimate for RGA’s 2024 earnings per share has moved up 0.6% in the past 30 days.
Manulife Financial has a solid track record of beating earnings estimates in each of the last four quarters, the average being 6.66%. In the past year, shares of MFC have risen 14.1%.
The Zacks Consensus Estimate for MFC’s 2024 earnings per share is pegged at $2.65, indicating a year-over-year increase of 8.2%.
Primerica has a solid track record of beating earnings estimates in each of the last four quarters, the average being 7.84%. In the past year, shares of PRI have gained 43.5%.
The Zacks Consensus Estimate for PRI’s 2024 earnings per share is pegged at $17.61, indicating an increase of 9.9% year over year.
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Here's Why Investors Should Bet on Brown & Brown (BRO) Now
Brown & Brown, Inc. (BRO - Free Report) is poised to benefit from its new businesses, improved customer retention, premium rate increases across the majority of business lines, strategic acquisitions and a strong financial position.
BRO has a decent history of delivering earnings surprises in each of the last four reported quarters.
Zacks Rank and Price Performance
Brown & Brown presently carries a Zacks Rank #2 (Buy). Shares of the company have gained 18.3% over the past year compared with the industry’s growth of 7.5%.
Image Source: Zacks Investment Research
Rising Estimates
The Zacks Consensus Estimate for BRO’s 2024 earnings per share is pegged at $3.03, indicating a year-over-year increase of 9.7% on 8.1% higher revenues of $4.55 billion.
Business Tailwinds
Brown and Brown’s commissions and fees should continue to benefit from increasing new businesses, strong retention and continued rate increases for most lines of coverage. This, in turn, should drive the top line. The top line witnessed a five-year annual growth rate of 14%.
The insurance broker intends to make consistent investments in boosting organic growth and margin expansion. BRO expects its diversification and solid underwriting results to help it retain its business and expand its capacity in the future.
Brown & Brown boasts an impressive inorganic story that helps strengthen its compelling products and service portfolio, expand global reach and accelerate the growth rate. Strategic buyouts also help BRO to capitalize on growing market opportunities. The company completed seven acquisitions, which are expected to generate annual revenues of $14 million. The acquisition of Kentro Capital was completed in October 2023 and is expected to add specialty capabilities and consolidate its presence in London.
Backed by a sustained operational performance, Brown & Brown maintained a strong liquidity position. BRO has a strong cash conversion due to the strength of its operating model and diversity of businesses. Moreover, the company reduced its outstanding debt in the third quarter by making payments of $100 million.
The consensus estimate for 2024 earnings has moved 0.3% north in the past 30 days, reflecting analysts’ optimism.
Impressive Dividend History
A solid capital position supported BRO in increasing dividends over the last 29 years. Dividends witnessed a five-year (2019-2023) CAGR of 10.2%, making it an attractive pick for yield-seeking investors.
Other Stocks to Consider
Some other top-ranked stocks from the insurance industry are Reinsurance Group of America (RGA - Free Report) , Manulife Financial Corp. (MFC - Free Report) and Primerica, Inc. (PRI - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Reinsurance Group beat estimates in three of the last four quarters and missed in one, the average being 18.81%. In the past year, shares of RGA have gained 15.5%.
The Zacks Consensus Estimate for RGA’s 2024 earnings per share has moved up 0.6% in the past 30 days.
Manulife Financial has a solid track record of beating earnings estimates in each of the last four quarters, the average being 6.66%. In the past year, shares of MFC have risen 14.1%.
The Zacks Consensus Estimate for MFC’s 2024 earnings per share is pegged at $2.65, indicating a year-over-year increase of 8.2%.
Primerica has a solid track record of beating earnings estimates in each of the last four quarters, the average being 7.84%. In the past year, shares of PRI have gained 43.5%.
The Zacks Consensus Estimate for PRI’s 2024 earnings per share is pegged at $17.61, indicating an increase of 9.9% year over year.