December 14, 2025 a 07:46 am
BRO: Dividend Analysis - Brown & Brown, Inc.
Brown & Brown, Inc. (BRO) presents an attractive case for dividend-seeking investors with a robust 39-year dividend history. Despite a relatively low yield of 0.79%, the company's steady growth in dividend payouts and significant commitment to shareholders indicate financial strength and dividend safety. However, investors should be aware of the low payout ratios when considering reinvestment policies or growth strategies.
📊 Overview
Brown & Brown, Inc. has established itself as a reliable dividend-paying company within the financial services sector. The firm's consistent dividend growth and the absence of cuts or suspensions since 1991 underscore its robust financial stability.
| Category | Details |
|---|---|
| Sector | Financial Services |
| Dividend yield | 0.79% |
| Current dividend per share | 0.546 USD |
| Dividend history | 39 years |
| Last cut or suspension | 1991 |
📈 Dividend History
Consistency in dividend payments serves as a hallmark of financial health and investor orientation. With a continuous upwards trend in dividends for nearly four decades, Brown & Brown, Inc. exemplifies a shareholder-friendly policy. This stability often aligns with secure investments and can act as a buffer in downturns.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 0.615 |
| 2024 | 0.54 |
| 2023 | 0.475 |
| 2022 | 0.4225 |
| 2021 | 0.38 |
📈 Dividend Growth
Stable growth in dividends over time signals financial health and management's confidence in future cash flow prospects. It is essential for dividend-seeking investors looking for inflation-hedging income streams.
| Time | Growth |
|---|---|
| 3 years | 12.43% |
| 5 years | 10.69% |
The average dividend growth is 10.69% over 5 years. This shows moderate but steady dividend growth.
📉 Payout Ratio
A sustainable payout ratio is crucial in assessing the ability of a company to maintain its dividends. With payout ratios of 18.09% based on EPS and 13.84% based on free cash flow, Brown & Brown, Inc. shows prudence in its dividend policy, ensuring ample room for reinvestment and economic downturns.
| Key figure | Ratio |
|---|---|
| EPS-based | 18.09% |
| Free cash flow-based | 13.84% |
These payouts illustrate a cautious approach, facilitating potential growth investments and providing a buffer against market fluctuations.
🗣️ Cashflow & Capital Efficiency
Evaluating the relationship between cash flow and capital efficiency metrics can reveal how effectively a company can finance dividends without compromising its growth. Monitoring ratios like Free Cash Flow Yield and CAPEX to Operating Cash Flow provides insight into the company's operational effectiveness and capital expenditure adequacy.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 3.80% | 4.71% | 5.23% |
| Earnings Yield | 3.45% | 4.36% | 4.24% |
| CAPEX to Operating Cash Flow | 6.98% | 6.83% | 5.90% |
| Stock-based Compensation to Revenue | 2.15% | 2.12% | 1.85% |
| Free Cash Flow / Operating Cash Flow Ratio | 93.02% | 93.17% | 94.10% |
This steady Free Cash Flow Yield and disciplined CAPEX strategy highlight Brown & Brown, Inc.'s efficient use of capital to both grow and support dividends.
📊 Balance Sheet & Leverage Analysis
Analyzing leverage ratios provides an understanding of the company's financial obligations relative to its equity and assets. This helps in assessing the company’s financial flexibility and solvency.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 0.63 | 0.72 | 0.91 |
| Debt-to-Assets | 0.23 | 0.27 | 0.30 |
| Debt-to-Capital | 0.39 | 0.42 | 0.48 |
| Net Debt to EBITDA | 1.96 | 2.14 | 2.92 |
| Current Ratio | 1.10 | 1.04 | 1.09 |
| Quick Ratio | 1.10 | 1.04 | 1.09 |
| Financial Leverage | 2.74 | 2.67 | 3.03 |
The incremental improvement in leverage ratios and healthy current and quick ratios suggest Brown & Brown, Inc. maintains a solid financial position, capable of meeting its obligations.
📈 Fundamental Strength & Profitability
Profitability and efficiency metrics such as Return on Equity and Margins are pivotal in assessing a company's ability to generate returns on its investments.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 15.43% | 15.60% | 14.58% |
| Return on Assets | 5.64% | 5.85% | 4.81% |
| Margins: Net | 21.11% | 20.73% | 18.85% |
| EBIT | 31.97% | 31.98% | 28.74% |
| EBITDA | 36.68% | 36.89% | 33.96% |
| Gross | 48.86% | 47.92% | 49.00% |
| Research & Development to Revenue | 0.0% | 0.0% | 0.0% |
Robust margins and consistent returns suggest efficient operational practices and financial viability for sustaining dividend distributions.
📉 Price Development
✅ Dividend Scoring System
| Criteria | Score | Visual |
|---|---|---|
| Dividend yield | 2 | |
| Dividend Stability | 5 | |
| Dividend growth | 4 | |
| Payout ratio | 5 | |
| Financial stability | 4 | |
| Dividend continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 4 |
Aggregate Score: 33/40
🗣️ Rating
Brown & Brown, Inc. is a reliable choice for investors seeking steady income through dividends. Its prolonged history of payouts, coupled with prudent financial management, makes it an ideal candidate for a dividend-focused portfolio. However, the lower yield may not satisfy income-focused investors. Continued performance monitoring is advised.