BROWN & BROWN (BRO, Financial) is a leading insurance broker with an outstanding corporate culture that helps generate the highest margins in its industry. Net income for the 4th quarter of 2013 was $47.2 million, or $0.32 per share, which was a 10% increase from 2012. Total 2013 revenue was $1.4 billion, a 13.6% increase from 2012, while earnings rose 18% to $1.48 per share.
After several years showing sparse growth, Brown & Brown has begun to grow organically while continuing to maintain the highest profit margins in the industry. In fact, during the 1997 to 2007 insurance cycle, Brown & Brown grew EPS at 20% per year but, since that 2007 earnings peak, organic growth slowed significantly. In fact, 2012 and 2013’s earnings growth was the best in several years and we believe earnings growth should continue in the 10-15% range over the next couple of years; helped primarily by acquisitions.
