Brown & Brown, Inc. (NYSE: BRO)

Sector: Financial Services Industry: Insurance Brokers CIK: 0000079282
Market Cap 19.47 Bn
P/B 9.06
P/E 80.03
P/S 11.73
ROIC (Qtr) 6.93
Div Yield % 0.57
Rev 1y % (Qtr) 35.84
Total Debt (Qtr) 7.86 Bn
Debt/Equity (Qtr) 0.63
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About

Brown & Brown, Inc., commonly known as BRO, operates in the insurance industry and is listed on the New York Stock Exchange under the symbol BRO. With a rich history dating back to 1939, the company has established itself as a diversified insurance agency, wholesale brokerage, insurance programs, and service organization. It has a significant presence in the United States and internationally, with operations in countries such as Canada, the Republic of Ireland, the United Kingdom, Germany, France, and Italy, among others. Brown & Brown's main business...

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Investment thesis

Bull case

  • Operating cash flow of 1.45B provides exceptional 111.54x coverage of minority interest expenses 13M, showing strong core operations.
  • Operating cash flow of 1.45B provides strong 15.59x coverage of stock compensation 93M, indicating sustainable incentive practices.
  • Robust free cash flow of 1.39B exceeds capital expenditure of 59M by 23.58x, indicating strong organic growth funding capability.
  • Tangible assets of 10B provide exceptional 9.49x coverage of deferred revenue 1.05B, showing strong service capability backing.
  • Operating cash flow of 1.45B fully covers other non-current liabilities 934M by 1.55x, showing strong long-term stability.

Bear case

  • Operating cash flow of 1.45B barely covers its investment activities of (7.91B), with a coverage ratio of -0.18, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 1.45B provides thin coverage of dividend payments of (193M) with a -7.51 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 1.08B provide limited coverage of acquisition spending of (7.85B), which is -0.14x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of 1.45B provides insufficient coverage of deferred revenue obligations of 1.05B, which is 1.38x, raising concerns about future service delivery capabilities.
  • High financing cash flow of 7.71B relative to working capital of 320M, which is 24.10x suggests concerning dependence on external funding for operational needs.

Consolidation Items Breakdown of Revenue (2025)

Geographical Breakdown of Revenue (2025)

Peer comparison

Companies in the Insurance Brokers
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 AON Aon plc 70.39 Bn 19.05 4.10 15.89 Bn
2 AJG Arthur J. Gallagher & Co. 54.84 Bn 36.71 3.93 13.49 Bn
3 WTW Willis Towers Watson Plc 19.93 Bn 59.66 5.32 5.91 Bn
4 BRO Brown & Brown, Inc. 19.47 Bn 80.03 11.73 7.86 Bn
5 ERIE Erie Indemnity Co 13.20 Bn 70.61 8.51 0.00 Bn
6 CRVL Corvel Corp 2.55 Bn 24.11 2.71 0.02 Bn
7 ARX Accelerant Holdings 1.78 Bn 65.50 2.96 0.12 Bn
8 GSHD Goosehead Insurance, Inc. 1.28 Bn 42.19 3.61 0.35 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.67 0.36
EV to Cash from Ops. EV/CFO 52.29 12.25
EV to Debt EV to Debt 2.54 7.89
EV to EBIT EV/EBIT 45.19 12.89
EV to EBITDA EV/EBITDA 36.10 10.03
EV to Free Cash Flow [EV/FCF] EV/FCF 53.38 0.82
EV to Market Cap EV to Market Cap 1.03 -2,042.77
EV to Revenue EV/Rev 12.02 2.24
Price to Book Value [P/B] P/B 9.06 2.88
Price to Earnings [P/E] P/E 80.03 21.56
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 5.46 1.26
Dividend Payout Ratio % Div Payout % (Qtr) 18.20 32.25
Dividend per Basic Share Div per Share (Qtr) 0.63 0.99
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 15.46 18.58
Interest Coverage Int. cover (Qtr) 5.57 -4.31
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -391.67 -64.94
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 59.85 1.65
Dividend Growth (1y) % Div 1y % (Qtr) 12.50 -3.13
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 12.57 -0.20
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 22.08 -8.63
EBIT Growth (1y) % EBIT 1y % (Qtr) 11.30 17.79
EBT Growth (1y) % EBT 1y % (Qtr) 4.95 32.64
EPS Growth (1y) % EPS 1y % (Qtr) -3.16 -77.22
FCF Growth (1y) % FCF 1y % (Qtr) 19.71 -60.35
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 22.83 44.50
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.20 0.62
Cash Payout Ratio Cash Payout (Qtr) 0.13 0.18
Cash Ratio Cash Ratio (Qtr) 0.13 0.51
Current Ratio Curr Ratio (Qtr) 1.04 2.20
Debt to Equity Ratio Debt/Equity (Qtr) 0.63 0.87
Interest Cover Ratio Int Coverage (Qtr) 5.57 -4.31
Times Interest Earned Times Interest Earned (Qtr) 5.57 -4.31
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 34.30 -2.17
EBIT Margin % EBIT Margin % (Qtr) 28.04 -69.72
EBT Margin % EBT Margin % (Qtr) 23.01 -8.04
Gross Margin % Gross Margin % (Qtr) 100.00 50.03
Net Profit Margin % Net Margin % (Qtr) 17.90 -10.75