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Why You Should Add Brown & Brown (BRO) to Your Portfolio
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Brown & Brown Inc. (BRO - Free Report) is poised for long-term growth on the back of its prudent growth initiatives, solid capital position and effective capital deployment. The Zacks Consensus Estimate for 2019 earnings is pegged at $1.35, indicating 9.8% year-over-year increase on 15.9% higher revenues.
A compelling product portfolio has been helping the company generate strong commission and fees, which, in turn, has been fueling revenue growth. Brown & Brown estimates revenues between $210 million and $220 million in 2019
Apart from organic growth, Brown & Brown’s impressive growth is also driven by inorganic means. Strategic acquisitions and mergers help it spread its operations. In over a span of a little more than two decades, the company has acquired more than 470 insurance intermediary operations. The recent acquisition of Hays Companies is expected to generate $210 million to $220 million and $47 million to $53 million of EBITDAC in 2019. Also, the addition of Hays will drive revenue growth of more than 10% and EBITDAC growth of more than 8%.
Brown & Brown will be implementing an annual incentive program for its middle-market producers in the Retail division. This program is expected to fuel growth by focusing on customer retention and new business.
A sustained operational performance should continue to help maintain a solid capital position. Brown & Brown deploys capital effectively that in turn enhances its shareholders value. The company has raised its dividend for 25 years. Its dividend currently yields 1.2%.
Shares of this Zacks Rank #2 (Buy) insurance broker have gained 7.9% in a year, outperforming the industry’s 5.9% increase. The Zacks S&P 500 composite has however declined 6.8% in the same time frame.
Valuation looks attractive at current level as the price-to-book multiple of 2.62 is lower than the industry average of 4.66. Undervalued stocks with solid fundamentals are best investment bets.
The company’s expected long-term earnings growth is pegged at 10%.
Cigna provides health services, such as medical, dental, behavioral health, pharmacy, vision, supplemental benefits, among others. The company delivered 11.30% positive surprise in the last reported quarter.
MGIC Investment provides private mortgage insurance and ancillary services to lenders and government sponsored entities in the United States. The company delivered 33.33% positive surprise in the last reported quarter.
MetLife engages in the insurance, annuities, employee benefits, and asset management businesses. It came up with 10.40% positive surprise in the last reported quarter.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Why You Should Add Brown & Brown (BRO) to Your Portfolio
Brown & Brown Inc. (BRO - Free Report) is poised for long-term growth on the back of its prudent growth initiatives, solid capital position and effective capital deployment. The Zacks Consensus Estimate for 2019 earnings is pegged at $1.35, indicating 9.8% year-over-year increase on 15.9% higher revenues.
A compelling product portfolio has been helping the company generate strong commission and fees, which, in turn, has been fueling revenue growth. Brown & Brown estimates revenues between $210 million and $220 million in 2019
Apart from organic growth, Brown & Brown’s impressive growth is also driven by inorganic means. Strategic acquisitions and mergers help it spread its operations. In over a span of a little more than two decades, the company has acquired more than 470 insurance intermediary operations. The recent acquisition of Hays Companies is expected to generate $210 million to $220 million and $47 million to $53 million of EBITDAC in 2019. Also, the addition of Hays will drive revenue growth of more than 10% and EBITDAC growth of more than 8%.
Brown & Brown will be implementing an annual incentive program for its middle-market producers in the Retail division. This program is expected to fuel growth by focusing on customer retention and new business.
A sustained operational performance should continue to help maintain a solid capital position. Brown & Brown deploys capital effectively that in turn enhances its shareholders value. The company has raised its dividend for 25 years. Its dividend currently yields 1.2%.
Shares of this Zacks Rank #2 (Buy) insurance broker have gained 7.9% in a year, outperforming the industry’s 5.9% increase. The Zacks S&P 500 composite has however declined 6.8% in the same time frame.
Valuation looks attractive at current level as the price-to-book multiple of 2.62 is lower than the industry average of 4.66. Undervalued stocks with solid fundamentals are best investment bets.
The company’s expected long-term earnings growth is pegged at 10%.
Other Stocks to Consider
Investors interested in the insurance space can look at Cigna Corporation (CI - Free Report) , MGIC Investment Corporation (MTG - Free Report) and MetLife, Inc. (MET - Free Report) . Each of the stocks carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Cigna provides health services, such as medical, dental, behavioral health, pharmacy, vision, supplemental benefits, among others. The company delivered 11.30% positive surprise in the last reported quarter.
MGIC Investment provides private mortgage insurance and ancillary services to lenders and government sponsored entities in the United States. The company delivered 33.33% positive surprise in the last reported quarter.
MetLife engages in the insurance, annuities, employee benefits, and asset management businesses. It came up with 10.40% positive surprise in the last reported quarter.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>