Brown & Brown Inc (BRO)'s Winning Formula: Financial Metrics and Competitive Strengths

Delving into the Robust Financial Health and Growth Trajectory of Brown & Brown Inc

Brown & Brown Inc (BRO, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $74.48, Brown & Brown Inc has witnessed a daily gain of 2.24%, marked against a three-month change of 6.3%. A thorough analysis, underlined by the GF Score, suggests that Brown & Brown Inc is well-positioned for substantial growth in the near future.


What Is the GF Score?

The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.

Each one of these components is ranked and the ranks also have positive correlation with the long-term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With a high profitability and growth rank, and a moderate financial strength and GF Value rank, GuruFocus assigned Brown & Brown Inc the GF Score of 94 out of 100, which signals the highest outperformance potential.

Understanding Brown & Brown Inc's Business

Brown & Brown Inc is a prominent player in the insurance brokerage industry, with a market capitalization of $21.20 billion and sales of $4.11 billion. The company boasts an impressive operating margin of 28.32%, reflecting its efficiency in converting sales into profit. As an insurance agent and broker, Brown & Brown Inc connects customers with insurance companies, offering products and services primarily in property, casualty, and employee benefits. It generates revenue through commissions from insurance companies and direct fees from customers, while maintaining minimal underwriting risk exposure. The retail segment, which provides a wide array of insurance products and services to entities and individuals, contributes to more than half of its revenue. The national programs segment, accounting for roughly a quarter of revenue, offers professional liability coverage among other services. Brown & Brown Inc's operations are predominantly based in the United States, with Florida being its largest market.


Profitability Rank Breakdown

The Profitability Rank of Brown & Brown Inc is a testament to its superior ability to generate earnings compared to its industry counterparts. With a rank of 9 out of 10, the company's profitability metrics are indicative of strong financial health and operational efficiency. Furthermore, Brown & Brown Inc's Predictability Rank of 4.5 stars out of five underscores its consistent operational performance, providing investors with increased confidence in the company's ability to maintain its earnings trajectory.

Growth Rank Breakdown

Brown & Brown Inc's high Growth Rank reflects its commitment to expanding its business and enhancing shareholder value. The company's 3-Year Revenue Growth Rate of 13.8% outperforms 81.03% of 448 companies in the Insurance industry. Additionally, the company has experienced a robust increase in its EBITDA over the past few years, with a three-year growth rate of 18.4 and a five-year rate of 15.6. This consistent growth in earnings before interest, taxes, depreciation, and amortization highlights Brown & Brown Inc's ability to scale its operations effectively.


Next Steps

Considering Brown & Brown Inc's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential outperformance. Investors seeking to capitalize on this momentum can look to the company's strategic initiatives, market position, and consistent operational performance as indicators of future success. For those interested in finding more companies with strong GF Scores, GuruFocus Premium members can use the following screener link: GF Score Screen.

This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.


I/We may personally own shares in some of the companies mentioned above. However, those positions are not material to either the company or to my/our portfolios.