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Fundamental analysis: Brown & Brown, Inc. (BRO)

Awarener score: 6.9

Conclusion

Note: All scores range from 1 (worst) to 10 (best). Conclusions are updated daily with closing stock prices and new reported quarterly financial statements.

Revenue score: 8.5

• Business has been growing at a good pace. It's been similar to peer companies.
• Brown & Brown, Inc. business trend is extremely stable, which is best. It looks better than most rivals.

Margins score: 8.7

• BRO profit margins -on goods and services sold- are usually good. They stand somewhat better than rival companies.
• Business profit on sales tends to be huge. It's top tier when measured against competitors.
• Profits on sales made -available to repay debt and purchase properties- are usually very good. They remain impressive in relation to peers.
• Earnings -before income taxes and interests on loans taken- tend to be excellent in relation to total revenues. They're still top-notch against similar companies.
• Profits -before income taxes- are usually excellent considering total sales, and remain top tier when measured against rivals.
• Total net profit tends to be excellent when confronted to sales. Company stands top tier when measured against comparable firms.

Growth score: 6.0

• Brown & Brown, Inc. profit -on goods and services sold- has been growing at a normal pace. It's been lacking compared to competitors.
• In recent years, earnings -on operations- have been growing at a normal step, which has been slightly worse than comparable firms.
• Profits -available to repay debt and purchase properties- have been growing at a normal pace, which compares encouraging in relation to peer enterprises.
• Earnings -before income taxes and interests on loans taken- have been growing at a normal tempo. It turns to be rather normal in relation to similar stocks.
• In past years, profits -before income taxes- grew at a normal speed. It was slightly worse than rivals.
• In the previous years, growth on total net profit has been average, and similar to peer companies.
• Earnings per share have grown at a normal rhythm in past years. It's been rather normal in relation to industry peers.

Miscellaneous score: 4.0

• BRO had to pay substantial income taxes in relation to profits made in the past years. It's been somewhat worse than peers.
• The company does not report R&D expenses. It's meaningless to measure in relation to competitors.
• We have insufficient data to estimate how effective is research and development effort. It stands unknown against rival companies.

Profitability score: 8.5

• Brown & Brown, Inc. usually gets very good returns on the resources it controls. It proves similar to peer firms.
• The company normally gets very good proceeds -on the resources directly invested in the business-. They remain rather normal in relation to similar companies.
• There's usually abundant profitability -in relation to owned resources-. It ranks similar to competitors.
• In the past, got huge returns -on the tangible resources it controls-. This metric is usually related to the industry in which operates and combines profitability versus reinvestment needs. It's great when measured against comparable enterprises.

Usage of Funds score: 5.6

• BRO usually uses a portion of genuine funds generated to buy or replace property, plant, or equipment. The need for reinvestments is rather normal. It stands great when measured against rival firms.
• The company is usually replacing part of the property, plant, and equipment that gets old, keeping some funds for something else. It can't keep forever, which is below average when measured against industry peers.
• In the past twelve months it paid low dividends, considering the current stock price. It came mediocre against competitors.
• Dividend payments have been more or less stable in recent years. The company has behaved lacking compared to similar firms.
• Dividend payments usually represent a minor portion of genuine funds generation and are most likely safe. Sustainability looks slightly better than comparable companies.
• The company barely enlarges the pool of investors, resulting in slightly more mouths feeding on the pie of profits. It remains in a weak position compared to peer enterprises.
• Repurchase effectiveness metric is very complex. Run again in analytical mode if you're interested in a technical explanation. It stands close to average when compared to rivals.
• The company uses a low portion of genuine fund generation to reward investors, which can most likely be sustained. It still looks encouraging in relation to competitors.

Balance Sheet score: 5.2

• Brown & Brown, Inc. intangible assets (like brands and goodwill) represent a huge portion of resources controlled, according to accounting books. There could be major difficulties in liquidating them if the company ever gets in financial distress. It happens to be substantially worse when measured against peer companies.
• The company has somewhat lower short-term resources than short-term obligations. Unless it's part of the business model, there might some liquidity concerns. It turns to be in a weak position compared to similar firms.
• Roughly a third of resources controlled were provided for with financial debt. Creditors have claims on the company. It remains somewhat worse than rival firms.
• Most controlled resources might be only slowly turned into cash and equivalents, which is risky. It looks substantially worse when measured against rivals.
• For every dollar of short-term obligations, the company has few cents of cash and short-term receivables. It's a disappointment compared to peer firms.
• For every dollar of short-term obligations, the company has very few cents of cash and equivalents, which is mediocre against similar enterprises.
• Usually, sales are on cash. It still ranks top tier when measured against peers.
• Normally has no inventories. It comes up as impressive in relation to competitors.
• On average, it takes less than one month from the purchase to charging customers. It happens to be top-notch against peers.
• On average pays suppliers longer than two months after the purchase. It ranks great when measured against industry peers.
• The company charges its customers before it must pay its suppliers, so the more it sales, the more free funds it gets. It's excellent in relation to similar companies.
• Net interest expenses consume a minor portion of usual business earnings, and are largely bearable. It stands slightly worse than rival firms.
• Business earnings have usually been low when measured against loans taken. Even cutting back reinvesting in the business, it could take more than seven years to repay the obligations with current profitability. It ranks below average when measured against comparable enterprises.
• Revenues are quite good in relation to property, plant, and equipment required to operate. This metric is likely dependent on the industry the company operates in. The more property, plant, and equipment used, the more the company must reinvest to fight obsolescence, which usually means less available funds for the shareholders in the long run. It looks in a weak position compared to similar firms.
• Resource exploitation is low when yearly sales are considered, business volume must be significantly increased. This metric is normally tied to the industry where the firm belongs. It's still worse than most peer companies.

Valuation score: 4.8

• Brown & Brown, Inc. looks expensive in relation to profits and financial position. It happens to be similar to competitors.
• Price-to-Tangible-Book-Value is a fairly complex metric. Run again in analytical mode if you're interested in a technical explanation. It remains a disappointment compared to peers.
• In the past twelve months, the company generated some slightly better free funds in relation to the stock price, which stands better than most similar companies.
• The company usually generates reasonably more than enough genuine funds to cover up for its business needs. Surplus cash may be used to repay loans, to eventually buy new businesses, or to reward investors. Considering the financial position and stock price, the current valuation might be fair. It's still similar to industry firms.
• In the past twelve months, the company hasn't rewarded investors, considering both dividends and share on the pie of earnings. It came up close to average when compared to peer ventures.
• The company is somewhat indebted, loan repayment needs to be taken into account. It looks mediocre against similar enterprises.
• Considering the past twelve months, traditional Price-to-Earnings relation is high. Substantial improvement expectations are already in the stock price, which is somewhat risky. It ranks more than average in relation to peer companies.
• Comparing the current stock price with the past twelve-months revenues gives a very high relationship. This is an important metric to check its evolution through time, and to compare to industry peers. It looks in a weak position compared to rival firms.
• The relation between the stock price and accounting book value is significantly high, which may be good or bad depending on context. Run again in analytic mode if you want to dig deeper. The company remains somewhat worse than peer firms.
• In the past twelve months, the operating business earned little money when compared to the current stock price and financial position. It happens to be great when measured against industry peers.
• In an alternate metric of bang for the buck, the company has usually shown a modest earnings power ability when measured against the current stock price and financial position. It's still a slight improvement compared to peer companies.

Total score: 6.4

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Awarener score: 6.9

Conclusion

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