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Shares of Brown & Brown, Inc. BRO have rallied 36.9% in the past year, outperforming the industry’s 22.8% growth. The insurer also outperformed the Zacks S&P 500 composite and the Finance sector’s return of 23% and 19.4%, respectively, in the past year. With a market capitalization of $29.15 billion, the average volume of shares traded in the last three months was 1.3 million.
BRO Outperformed Industry, Sector, S&P in a Year
Image Source: Zacks Investment Research
The expected long-term earnings growth is 11.6%. Earnings have grown 18.4% in the past five years, better than the industry average of 13.2%. This Zacks Rank #2 (Buy) insurance broker's bottom line outpaced estimates in each of the trailing four quarters, the average surprise being 6.87%.
BRO Trading Above 200-Day Moving Average
Currently priced at $101.95, the stock is trading above the 200-day simple moving average (SMA) of $97.69, indicating solid upward momentum. SMA is a widely used technical analysis tool to predict future price trends by analyzing historical price data.
BRO’s Growth Projection Encourages
The Zacks Consensus Estimate for Brown & Brown’s 2025 earnings per share and revenues indicates an increase of 9.6% and 8.7%, respectively, from the corresponding 2024 estimates.
Optimistic Analyst Sentiment on BRO
Two of the seven analysts covering the stock have raised estimates for 2025 over the past 60 days. Thus, the Zacks Consensus Estimate for 2025 moved 0.9% north in the last 60 days.
Can the Stock Retain the Momentum?
Commissions and fees, the main component of the top line, benefit from increasing new business, strong retention and continued rate increases for most lines of coverage. The top line witnessed a five-year annual growth rate of 14%. The company met its intermediate annual revenue goal of $4 billion, doubling in the last five years.
The insurance broker continually makes investments in boosting organic growth and margin expansion. It has an industry-leading adjusted EBITDAC margin.
Brown & Brown’s strategic buyouts help it capitalize on growing market opportunities, strengthen its compelling products and service portfolio, expand global reach and accelerate its growth rate. For the third quarter of 2024, the insurance broker completed four acquisitions with estimated annual revenues of $8 million and continued to build relationships with many other companies. From 1993 through the third quarter of 2024, the company acquired 664 insurance intermediary operations.
Banking on operational expertise, BRO boasts a strong liquidity position with an improving leverage ratio. The strength of its operating model and diversity of businesses ensures strong cash conversion. The company effectively deploys cash into acquisitions, capital expenditure and wealth distribution for shareholders via dividend increases.
BRO has an impressive dividend history, raising dividends for 30 straight years. Dividends increased at a five-year CAGR of 8.7%. Its dividend yield is 0.5%.