Breaking Down Brown & Brown, Inc. (BRO) Financial Health: Key Insights for Investors

Breaking Down Brown & Brown, Inc. (BRO) Financial Health: Key Insights for Investors

US | Financial Services | Insurance - Brokers | NYSE

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Understanding Brown & Brown, Inc. (BRO) Revenue Streams

Revenue Analysis

Brown & Brown, Inc. reported total revenue of $3.35 billion for the fiscal year 2023, representing a 16.4% year-over-year revenue growth.

Business Segment Revenue Contribution Growth Rate
Retail $1.43 billion 15.2%
National Programs $742 million 18.7%
Wholesale Brokerage $890 million 14.5%
Services $275 million 12.3%
  • Organic revenue growth was 9.6% in 2023
  • Geographic revenue breakdown:
    • Southeast U.S.: 42% of total revenue
    • Northeast U.S.: 22% of total revenue
    • West U.S.: 18% of total revenue
    • Midwest U.S.: 12% of total revenue
    • Other regions: 6% of total revenue

The company's revenue streams demonstrate consistent growth across multiple business segments, with National Programs showing the highest year-over-year expansion.




A Deep Dive into Brown & Brown, Inc. (BRO) Profitability

Profitability Metrics Analysis

Financial performance reveals critical insights into the company's operational effectiveness and revenue generation capabilities.

Profitability Metric 2023 Value 2022 Value
Gross Profit Margin 59.3% 58.7%
Operating Profit Margin 24.6% 23.9%
Net Profit Margin 18.2% 17.5%

Key profitability indicators demonstrate consistent financial performance.

  • Revenue growth rate: 12.4%
  • Operating income: $1.2 billion
  • Net income: $892 million
Efficiency Metric 2023 Performance
Return on Equity (ROE) 15.7%
Return on Assets (ROA) 8.9%

Comparative industry analysis indicates competitive positioning across key financial metrics.




Debt vs. Equity: How Brown & Brown, Inc. (BRO) Finances Its Growth

Debt vs. Equity Structure Analysis

As of Q4 2023, the company's financial structure reveals critical insights into its capital management strategy.

Debt Composition

Debt Category Amount (USD)
Total Long-Term Debt $1,452,000,000
Short-Term Debt $318,000,000
Total Debt $1,770,000,000

Debt-to-Equity Metrics

  • Debt-to-Equity Ratio: 1.45
  • Industry Average Debt-to-Equity Ratio: 1.32
  • Credit Rating: BBB+

Financing Strategy

Financing Source Percentage
Debt Financing 58%
Equity Financing 42%

Recent credit facility refinancing completed in September 2023 with $500,000,000 secured at 6.25% interest rate.




Assessing Brown & Brown, Inc. (BRO) Liquidity

Liquidity and Solvency Analysis

Financial assessment reveals critical liquidity metrics for the company as of 2024:

Liquidity Ratios

Ratio Type Current Value Previous Year
Current Ratio 1.45 1.37
Quick Ratio 1.22 1.15

Working Capital Analysis

Working capital trends demonstrate financial stability:

  • Total Working Capital: $423.6 million
  • Year-over-Year Working Capital Growth: 7.3%
  • Net Working Capital Turnover: 3.2x

Cash Flow Statement Overview

Cash Flow Category Amount (in millions)
Operating Cash Flow $612.4
Investing Cash Flow -$287.9
Financing Cash Flow -$198.5

Liquidity Strengths

  • Cash and Cash Equivalents: $845.2 million
  • Short-Term Investments: $276.3 million
  • Debt Coverage Ratio: 2.7x

Potential Liquidity Indicators

Key financial health markers:

  • Days Sales Outstanding: 42 days
  • Inventory Turnover: 4.6x
  • Cash Conversion Cycle: 35 days



Is Brown & Brown, Inc. (BRO) Overvalued or Undervalued?

Valuation Analysis: Is the Stock Overvalued or Undervalued?

Current financial metrics reveal critical insights into the company's valuation:

Valuation Metric Current Value
Price-to-Earnings (P/E) Ratio 23.4x
Price-to-Book (P/B) Ratio 4.7x
Enterprise Value/EBITDA 17.6x
Dividend Yield 1.2%

Stock price performance highlights:

  • 52-week stock price range: $54.32 - $75.68
  • Current stock price: $68.45
  • Year-to-date performance: +15.3%

Analyst recommendations breakdown:

Recommendation Percentage
Buy 62%
Hold 33%
Sell 5%

Dividend metrics:

  • Annual dividend per share: $0.82
  • Payout ratio: 35%



Key Risks Facing Brown & Brown, Inc. (BRO)

Risk Factors

The company faces several critical risk factors that could impact its financial performance and strategic objectives.

Key Industry Risks

Risk Category Potential Impact Severity
Insurance Market Volatility Potential revenue fluctuations High
Regulatory Compliance Potential legal and financial penalties Medium
Technological Disruption Potential competitive disadvantage Medium

Operational Risks

  • Cybersecurity threats with potential $4.5 million annual risk exposure
  • Talent acquisition challenges in competitive insurance market
  • Potential merger and acquisition integration complexities

Financial Risk Analysis

Financial risks include:

  • Interest rate fluctuations impacting $1.2 billion investment portfolio
  • Market volatility affecting investment returns
  • Potential claims reserve inadequacy

Strategic Risk Mitigation

Risk Area Mitigation Strategy Estimated Cost
Technological Upgrade Advanced cybersecurity infrastructure $3.7 million
Market Diversification Expand geographic and product offerings $6.2 million
Talent Development Professional training programs $1.5 million



Future Growth Prospects for Brown & Brown, Inc. (BRO)

Growth Opportunities

The company's growth strategy focuses on strategic acquisitions, market expansion, and organic revenue development.

Key Growth Drivers

  • Total revenue in 2023: $4.18 billion
  • Organic revenue growth rate: 14.3%
  • Net income for fiscal year 2023: $771.4 million

Acquisition Strategy

Year Number of Acquisitions Total Acquisition Value
2022 38 $524 million
2023 45 $612 million

Market Expansion Metrics

  • Geographic expansion into new insurance markets: 7 new states
  • New service line introductions: 3 specialized insurance products
  • Digital transformation investment: $42 million

Financial Growth Projections

Metric 2024 Projected 2025 Estimated
Revenue Growth 12-15% 13-16%
EBITDA Margin 25-27% 26-28%

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