On Jun 23, 2015, shares of Brown & Brown Inc. BRO hit a 52-week high of $33.81 on the back of a strong inorganic growth story. About 0.4 million shares exchanged hands in the last trading session, with the stock finally closing at $33.65. The stock has returned 10.17% in a one-year period, higher than 8.22% clocked by the S&P.
Brown & Brown boasts impressive growth driven by strategic acquisitions and mergers, in addition to organic growth across all segments that helps it spread its operations successfully.
To date, in the quarter, the insurance broker’s subsidiaries have inked a couple of deals to acquire assets while completing one acquisition. This month, while Brown & Brown of Colorado, Inc. will buy certain assets of Fitness Insurance; Brown & Brown of Massachusetts, LLC will buy assets of Strategic Benefit Advisors, Inc. In May, a subsidiary within the company’s National Programs Division acquired certain assets of Bellingham Underwriters, Inc.
Brown & Brown’s merger and acquisition strategy plays an integral role in its success story. With the acquisition of more than 459 insurance intermediaries to its credit, Brown & Brown flaunts a solid history of portfolio enhancement. Notably, its strategic buyouts are well supported by a strong liquidity position.
With respect to its quarterly performance, this Zacks Rank #3 (Hold) insurance broker has delivered positive earnings surprises in two of the last four quarters, with an average beat of 10.44%.
The Zacks Consensus Estimate of earnings is currently pegged at $1.71 for 2015 and $1.89 for 2016, which translate into a year-over-year improvement of 18.21% and 10.44%, respectively. The expected long-term growth rate for the stock is 9.20%.
Stocks to Consider
Better-ranked insurers include Argo Group International Holdings, Ltd. AGII, Endurance Specialty Holdings Ltd. ENH and Markel Corp. MKL. All the three stocks sport a Zacks Rank #1 (Strong Buy).
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