Brown & Brown Rises 36.9% in a Year: How Should You Play the Stock?

Company Performance - Brown & Brown, Inc. (BRO) shares have increased by 36.9% over the past year, outperforming the industry growth of 22.8% and the S&P 500 composite return of 23% [1] - The company has a market capitalization of $29.15 billion, with an average trading volume of 1.3 million shares over the last three months [1] Earnings Growth - The expected long-term earnings growth for BRO is 11.6%, with earnings having grown by 18.4% over the past five years, surpassing the industry average of 13.2% [2] - The Zacks Consensus Estimate for BRO's 2025 earnings per share and revenues indicates increases of 9.6% and 8.7%, respectively, from the 2024 estimates [4] Stock Performance and Technical Indicators - Currently priced at $101.95, BRO is trading above its 200-day simple moving average (SMA) of $97.69, indicating strong upward momentum [3] - The stock has consistently outperformed the industry, sector, and S&P 500 over the past year [9] Analyst Sentiment - Two out of seven analysts covering BRO have raised their estimates for 2025 in the past 60 days, resulting in a 0.9% increase in the Zacks Consensus Estimate for 2025 [5] Revenue Growth and Business Strategy - Commissions and fees, the main revenue component, have benefited from new business growth, strong retention, and continued rate increases, with a five-year annual growth rate of 14% [6] - The company has achieved its intermediate annual revenue goal of $4 billion, doubling its revenue in the last five years [6] Acquisitions and Market Position - BRO has completed four acquisitions in the third quarter of 2024, with estimated annual revenues of $8 million, and has acquired a total of 664 insurance intermediary operations since 1993 [8] - The company continues to invest in organic growth and margin expansion, maintaining an industry-leading adjusted EBITDAC margin [7] Financial Health - BRO has a strong liquidity position and an improving leverage ratio, ensuring effective cash deployment into acquisitions, capital expenditures, and shareholder dividends [10] - The company has a history of raising dividends for 30 consecutive years, with a five-year compound annual growth rate (CAGR) of 8.7% and a current dividend yield of 0.5% [10]