For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.
The fear of missing out, or FOMO, also plays a factor in investing, especially with particular tech giants, as well as popular consumer-facing stocks.
What if you'd invested in Brown & Brown (BRO) ten years ago? It may not have been easy to hold on to BRO for all that time, but if you did, how much would your investment be worth today?
Brown & Brown's Business In-Depth
With that in mind, let's take a look at Brown & Brown's main business drivers.
Headquartered in Daytona Beach, Fl and founded in 1939, Brown & Brown, Inc. markets and sells insurance products and services primarily in the United States, as well as in London, Bermuda, and the Cayman Islands.
The company reports through four segments:
The Retail segment (58% of 2021 commissions and fees) provides a broad range of insurance products and services to commercial, public and quasi-public entities, and to professional and individual customers.The categories of insurance it principally sells include commercial packages, group medical, workers’ compensation, property risk and general liability. It also sells and services group and individual life, accident, disability, health, hospitalization, medical, dental and other ancillary insurance products. Approximately 85.9% of the Retail Segment’s commissions and fees revenues are commission based.
The National Programs segment (23%) provides professional liability and related package products for certain professionals through nationwide networks of independent agents. The segment offers more than 51 programs, which can be grouped into five broad categories namely Professional Programs, Personal Lines Programs, Commercial Programs, Public Entity-Related Programs and the National Flood Program.
The Wholesale Brokerage segment (13.2%) markets and sells excess and surplus commercial and personal lines insurance, primarily through independent agents and brokers. The Wholesale Brokerage Segment offices represent various U.S. and U.K. surplus lines insurance companies. Additionally, certain offices are also Lloyd’s of London correspondents.
The Services segment (5.8%) markets and sells excess and surplus commercial and personal lines insurance, primarily through independent agents and brokers.It offers third-party claims administration and medical utilization management services in the workers' compensation and all-lines liability arenas, Medicare Set-aside, Social Security disability, Medicare benefits advocacy and claims adjusting services.
While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in Brown & Brown ten years ago, you're probably feeling pretty good about your investment today.
A $1000 investment made in July 2012 would be worth $4,988.76, or a gain of 398.88%, as of July 29, 2022, according to our calculations. This return excludes dividends but includes price appreciation.
The S&P 500 rose 193.83% and the price of gold increased 3.87% over the same time frame in comparison.
Analysts are forecasting more upside for BRO too.
Brown & Brown’s compelling portfolio along with an impressive growth trajectory driven by organic and inorganic initiatives across all its segments bodes well. Buyouts and collaborations enhanced its existing capabilities and extended its geographic foothold. Strategic efforts continue to drive commission and fees. Its solid capital position, backed by strong operational environment, places it well for long-term growth. Brown & Brown's sturdy performance has been driving cash flow, enabling it to deploy capital in shareholder-friendly moves. The insurance boasts a strong balance sheet backed by a solid cash position. Shares of Brown & Brown have outperformed its industry in the past year. However, escalating expenses are likely to affect the margin expansion. Poor ROE implies inefficient utilization of shareholder's fund.
Over the past four weeks, shares have rallied 10.35%, and there have been 3 higher earnings estimate revisions in the past two months for fiscal 2022 compared to none lower. The consensus estimate has moved up as well.
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