From the August IAS: Brown & Brown’s second quarter results indicate continued execution of its growth strategy. Total earnings and revenue each increased 15%, including 5% internal revenue growth with the balance coming from acquisitions. EPS expanded 12%. The company also raised $200 million in the debt market at fixed coupon rates of 5.7-6%, which management refers to as “dry powder†for future acquisitions. Going forward, the company is expecting lower internal growth, as the improving economy will fail to compensate for nationwide price declines in the commercial property insurance industry. With internal growth slowing, Brown’s success becomes more dependent on its proven ability to acquire and integrate good companies. BRO (44.75) is a buy up to 39.
Company Description: Brown & Brown, operates a diversified insurance brokerage firm that markets property/casualty products and services to commercial, professional, individual customers. The company’s property insurance protects against physical damage to property and the resultant interruption of business caused by firestorm, windstorm, or other perils. Casualty insurance relates to legal liabilities, workers’ compensation, commercial and private automobile insurance, and fidelity and surety insurance. Has about 3,400 empls. Off./ dir. own 21.1% of stock; J. Hyatt Brown, 15.8%; T. Rowe Price, 5.4% (3/04 Proxy). Chairman and CEO: J. Hyatt Brown. Inc. Fl. Addr.: 220 South Ridgewood Ave., Daytona Beach, FL 32114. Tel.: 386-252-9601. Internet: www.brown-n-brown.com