Revenue minus cost of goods sold. Graham's ≥40% threshold identifies businesses with durable pricing power. Note: software and financial companies naturally exceed this; retailers and manufacturers rarely reach it due to their cost structures.
Operating Margin26.1%
Profit after operating costs before interest and taxes. A consistent ≥15% operating margin signals a business with real competitive advantages. Capital-intensive industries (airlines, auto, commodities) rarely hit this threshold due to their structural cost base — compare within industry for context.
Net Income Margin18.3%
Bottom-line profit as a percentage of revenue. The ≥20% target reflects Buffett's preference for highly profitable businesses. Financial engineering (buybacks, tax optimisation) can inflate this temporarily — look for consistency across multiple years rather than a single strong result.
Financial Health
D
Years to Pay Off Debt7.5 yrs
Total Debt ÷ Net Income. Lower = stronger balance sheet. Important caveat: utilities, telecoms, REITs, and infrastructure companies carry large structural debt by design — their bond-like cash flows service it comfortably at ratios that would alarm Graham. Compare within sector.
Working Capital vs Long-Term Debt-$6.6B
Working Capital minus Long-Term Debt. Negative results are common and expected in capital-return-focused businesses like Apple, Domino's, and McDonald's — where aggressive buybacks and dividends intentionally reduce book equity. This does not indicate financial distress in high-FCF businesses.
Working Capital$320M
Current Assets minus Current Liabilities. Negative working capital can be a deliberate efficiency strategy in businesses that collect cash before paying suppliers (retailers, fast food franchises, subscription businesses). Assess alongside free cash flow generation for full context.
Valuation
F
Margin of Safety0.0%
How far below the Graham Number the stock trades. Graham required a 33% discount as a buffer against analytical error. However, the Graham Number itself assumes 1960s-era P/E and P/B norms — for modern asset-light businesses it often understates true intrinsic value, making 0% MoS appear misleadingly bad.
Price-to-Book1.60x
Market price vs book value per share. Rarely below 1.5x for quality businesses today. Intangible assets (brand, software, patents) don't appear on the balance sheet under accounting rules, making P/B artificially high for asset-light companies like software and consumer brands.
Cash Flow
A
Free Cash Flow$1.4B
Operating cash flow minus capital expenditures. Buffett's most important metric — cash a business actually generates for its owners after maintaining and growing its asset base. Consistently positive FCF is one of the strongest indicators of a durable, well-run business regardless of accounting profits.
CapEx % of Net Income6.5%
Capital expenditure as a share of net income. Low CapEx signals a capital-light business that doesn't need heavy reinvestment to sustain earnings — Buffett's ideal. High CapEx is structurally necessary in manufacturing, airlines, telecoms, and semiconductors. For these industries, a high reading reflects the business model, not poor management.
Owner Earnings$1.5B
Net Income + Depreciation & Amortisation − Capital Expenditures. Buffett's preferred measure of a company's true annual earning power — what could theoretically be distributed to owners without impairing the business. More reliable than reported EPS because it accounts for the capital cost of maintaining the business.
About Brown & Brown, Inc.
Brown & Brown, Inc. markets and sells insurance products and services in the United States, the United Kingdom, and internationally. It operates through Retail and Specialty Distribution segments. The Retail segment provides property and casualty, employee benefits insurance products, personal insurance products, specialties insurance products, risk management strategies, loss control survey and analysis, consultancy, and claims processing services. This segment also offers non-insurance services and products through automobile and recreational vehicle dealer services businesses. It serves commercial, public and quasi-public entities, professional, and individual customers. The Specialty Distribution segment comprises wholesale brokerage and specialty businesses. This segment offers professional liability and related package insurance products for dentistry, legal, eyecare, insurance, insurance, financial, physicians, real estate title professionals, as well as supplementary insurance products related to weddings, events, medical facilities, and cyber liabilities. This segment also provides public entity-related and specialty programs through a network of independent agents; and program management services for insurance carrier partners. In addition, the company's wholesale brokerage businesses underwrite and place excess and surplus commercial and personal lines insurance through independent agents and brokers. Its programs businesses operate under the Arrowhead Programs' name. Brown & Brown, Inc. was founded in 1939 and is headquartered in Daytona Beach, Florida.
Brown & Brown, Inc. markets and sells insurance products and services in the United States, the United Kingdom, and internationally. It operates through Retail and Specialty Distribution segments. The Retail segment provides property and casualty, employee benefits insurance products, personal insurance products, specialties insurance products, risk management strategies, loss control survey and analysis, consultancy, and claims processing services. This segment also offers non-insurance services and products through automobile and recreational vehicle dealer services businesses. It serves commercial, public and quasi-public entities, professional, and individual customers. The Specialty Distribution segment comprises wholesale brokerage and specialty businesses. This segment offers professional liability and related package insurance products for dentistry, legal, eyecare, insurance, insurance, financial, physicians, real estate title professionals, as well as supplementary insurance products related to weddings, events, medical facilities, and cyber liabilities. This segment also provides public entity-related and specialty programs through a network of independent agents; and program management services for insurance carrier partners. In addition, the company's wholesale brokerage businesses underwrite and place excess and surplus commercial and personal lines insurance through independent agents and brokers. Its programs businesses operate under the Arrowhead Programs' name. Brown & Brown, Inc. was founded in 1939 and is headquartered in Daytona Beach, Florida.
Metric Explanations
What each dimension measures and where the thresholds come from.
Gross Profit Margin
Revenue minus cost of goods sold. Graham's ≥40% threshold identifies businesses with durable pricing power. Note: software and financial companies naturally exceed this; retailers and manufacturers rarely reach it due to their cost structures.
Operating Margin
Profit after operating costs before interest and taxes. A consistent ≥15% operating margin signals a business with real competitive advantages. Capital-intensive industries (airlines, auto, commodities) rarely hit this threshold due to their structural cost base — compare within industry for context.
Net Income Margin
Bottom-line profit as a percentage of revenue. The ≥20% target reflects Buffett's preference for highly profitable businesses. Financial engineering (buybacks, tax optimisation) can inflate this temporarily — look for consistency across multiple years rather than a single strong result.
Years to Pay Off Debt
Total Debt ÷ Net Income. Lower = stronger balance sheet. Important caveat: utilities, telecoms, REITs, and infrastructure companies carry large structural debt by design — their bond-like cash flows service it comfortably at ratios that would alarm Graham. Compare within sector.
Working Capital vs Long-Term Debt
Working Capital minus Long-Term Debt. Negative results are common and expected in capital-return-focused businesses like Apple, Domino's, and McDonald's — where aggressive buybacks and dividends intentionally reduce book equity. This does not indicate financial distress in high-FCF businesses.
Working Capital
Current Assets minus Current Liabilities. Negative working capital can be a deliberate efficiency strategy in businesses that collect cash before paying suppliers (retailers, fast food franchises, subscription businesses). Assess alongside free cash flow generation for full context.
Margin of Safety
How far below the Graham Number the stock trades. Graham required a 33% discount as a buffer against analytical error. However, the Graham Number itself assumes 1960s-era P/E and P/B norms — for modern asset-light businesses it often understates true intrinsic value, making 0% MoS appear misleadingly bad.
Price-to-Book
Market price vs book value per share. Rarely below 1.5x for quality businesses today. Intangible assets (brand, software, patents) don't appear on the balance sheet under accounting rules, making P/B artificially high for asset-light companies like software and consumer brands.
Free Cash Flow
Operating cash flow minus capital expenditures. Buffett's most important metric — cash a business actually generates for its owners after maintaining and growing its asset base. Consistently positive FCF is one of the strongest indicators of a durable, well-run business regardless of accounting profits.
CapEx % of Net Income
Capital expenditure as a share of net income. Low CapEx signals a capital-light business that doesn't need heavy reinvestment to sustain earnings — Buffett's ideal. High CapEx is structurally necessary in manufacturing, airlines, telecoms, and semiconductors. For these industries, a high reading reflects the business model, not poor management.
Owner Earnings
Net Income + Depreciation & Amortisation − Capital Expenditures. Buffett's preferred measure of a company's true annual earning power — what could theoretically be distributed to owners without impairing the business. More reliable than reported EPS because it accounts for the capital cost of maintaining the business.
Mr. Market is currently offering Brown & Brown, Inc. at $59.10.
The business passes 4 of 7 of Graham's defensive criteria — adequate but not exceptional.
At $59.10, the stock trades at a 15% premium to its Graham Number of $51.30. Graham would consider this price speculative.
There is no margin of safety at the current price. Graham would advise patience and waiting for a better entry point.
Negative NCAV — liabilities exceed current assets. Common in capital-return businesses (buybacks, debt-funded dividends) and capital-intensive industries. Not automatically a warning sign..
Conclusion: This stock is better suited for Graham's Enterprising investor — one willing to devote time and skill to security selection.
Showing Key Metrics
Income Highlights
Metric
2025
2024
2023
2022
Gross Profit %
49.1%▲
48.9%▲
47.9%▼
49.0%
Operating Margin %
26.1%▼
29.1%▲
27.5%▲
27.0%
Net Income %
18.3%▼
21.1%▲
20.7%▲
18.9%
Diluted EPS
3.16▼
3.46▲
3.05▲
2.37
Balance Sheet Highlights
Metric
2025
2024
2023
2022
2021
Total Assets
$30.0B
$17.6B
$14.9B
$14.0B
N/A
Total Debt
$7.9B▲
$4.1B▲
$4.0B▼
$4.2B•
N/A
Working Capital
$320M▼
$610M▲
$174M▼
$399M•
N/A
Years to Pay Debt
7.51
4.09
4.62
6.22
N/A
Cash Flow Highlights
Metric
2025
2024
2023
2022
2021
Free Cash Flow
$1.4B▲
$1.1B▲
$941M▲
$829M•
N/A
Owner Earnings
$1.5B
$1.3B
$1.1B
$910M
N/A
CapEx % of Net Income
6.5%
8.3%
7.9%
7.7%
N/A
Income Statement
2025
2024
2023
2022
Tax Effect Of Unusual Items
26,741
31,647
43,380
13,514
Tax Rate For Calcs
0
0
0
0
Normalized EBITDA
1,923,000
1,589,000
1,362,000
1,152,000
Total Unusual Items
121,000
137,000
180,000
58,000
Total Unusual Items Excluding Goodwill
121,000
137,000
180,000
58,000
Net Income From Continuing Operation Net Minority Interest
1,054,000
993,000
871,000
672,000
Reconciled Depreciation
367,000
222,000
206,000
186,000
Reconciled Cost Of Revenue
2,935,000
2,406,000
2,187,000
1,817,000
EBITDA
2,044,000
1,726,000
1,542,000
1,210,000
EBIT
1,677,000
1,504,000
1,336,000
1,024,000
Net Interest Income
-306,000
-201,000
-190,000
-148,000
Interest Expense
306,000
201,000
190,000
148,000
Normalized Income
959,741
887,647
734,380
627,514
Net Income From Continuing And Discontinued Operation
1,054,000
993,000
871,000
672,000
Total Expenses
4,261,000
3,338,000
3,043,000
2,600,000
Diluted Average Shares
313,000
284,000
280,800
278,658
Basic Average Shares
310,000
282,000
279,600
277,521
Diluted EPS
0
0
0
0
Basic EPS
0
0
0
0
Diluted NI Availto Com Stockholders
989,000
981,000
858,000
659,000
Average Dilution Earnings
-54,000
0
0
Net Income Common Stockholders
1,043,000
981,000
858,000
659,000
Otherunder Preferred Stock Dividend
11,000
12,000
13,000
13,000
Net Income
1,054,000
993,000
871,000
672,000
Minority Interests
-13,000
-9,000
0
0
Net Income Including Noncontrolling Interests
1,067,000
1,002,000
871,000
672,000
Net Income Continuous Operations
1,067,000
1,002,000
871,000
672,000
Tax Provision
304,000
301,000
275,000
204,000
Pretax Income
1,371,000
1,303,000
1,146,000
876,000
Other Income Expense
175,000
137,000
180,000
61,000
Other Non Operating Income Expenses
54,000
7,000
5,300
3,000
Special Income Charges
-18,000
37,000
122,000
51,000
Gain On Sale Of Business
-2,000
31,000
143,000
5,000
Restructuring And Mergern Acquisition
16,000
-6,000
21,000
-46,000
Gain On Sale Of Security
139,000
100,000
58,000
7,000
Net Non Operating Interest Income Expense
-306,000
-201,000
-190,000
-148,000
Interest Expense Non Operating
306,000
201,000
190,000
148,000
Operating Income
1,502,000
1,367,000
1,156,000
963,000
Operating Expense
1,326,000
932,000
856,000
783,000
Other Operating Expenses
959,000
710,000
650,000
597,000
Depreciation Amortization Depletion Income Statement
367,000
222,000
206,000
186,000
Depreciation And Amortization In Income Statement
367,000
222,000
206,000
186,000
Amortization
312,000
178,000
166,000
147,000
Amortization Of Intangibles Income Statement
312,000
178,000
166,000
147,000
Depreciation Income Statement
55,000
44,000
40,000
39,000
Gross Profit
2,828,000
2,299,000
2,012,000
1,746,000
Cost Of Revenue
2,935,000
2,406,000
2,187,000
1,817,000
Total Revenue
5,763,000
4,705,000
4,199,000
3,563,000
Operating Revenue
5,763,000
4,705,000
4,199,000
3,563,000
Balance Sheet
2025
2024
2023
2022
2021
Treasury Shares Number
21,000
20,000
19,700
19,700
Ordinary Shares Number
336,000
285,958
284,600
283,200
Share Issued
357,000
305,958
304,300
302,900
Net Debt
6,534,000
3,149,000
3,096,000
3,292,100
Total Debt
7,918,000
4,060,000
4,020,000
4,183,000
Tangible Book Value
-7,446,000
-3,364,000
-3,383,000
-3,662,800
Invested Capital
20,160,000
10,244,000
9,375,000
8,548,700
Working Capital
320,000
610,000
174,000
399,400
Net Tangible Assets
-7,446,000
-3,364,000
-3,383,000
-3,662,800
Capital Lease Obligations
305,000
236,000
224,000
240,900
Common Stock Equity
12,547,000
6,420,000
5,579,000
4,606,600
Total Capitalization
19,441,000
10,019,000
8,806,000
8,298,100
Total Equity Gross Minority Interest
12,573,000
6,437,000
5,579,000
4,606,600
Minority Interest
26,000
17,000
0
Stockholders Equity
12,547,000
6,420,000
5,579,000
4,606,600
Gains Losses Not Affecting Retained Earnings
210,000
-109,000
-19,000
-148,400
Other Equity Adjustments
210,000
-109,000
-19,000
-148,400
Treasury Stock
848,000
748,000
748,000
748,000
Retained Earnings
6,989,000
6,128,000
5,289,000
4,553,000
Additional Paid In Capital
6,160,000
1,118,000
1,027,000
919,700
Capital Stock
36,000
31,000
30,000
30,300
Common Stock
36,000
31,000
30,000
30,300
Total Liabilities Net Minority Interest
17,418,000
11,175,000
9,304,000
9,366,900
Total Non Current Liabilities Net Minority Interest
9,124,000
4,861,000
4,348,000
4,770,300
Other Non Current Liabilities
1,172,000
362,000
326,000
298,900
Non Current Deferred Liabilities
815,000
711,000
616,000
584,000
Non Current Deferred Taxes Liabilities
815,000
711,000
616,000
584,000
Long Term Debt And Capital Lease Obligation
7,137,000
3,788,000
3,406,000
3,887,400
Long Term Capital Lease Obligation
243,000
189,000
179,000
195,900
Long Term Debt
6,894,000
3,599,000
3,227,000
3,691,500
Current Liabilities
8,294,000
6,314,000
4,956,000
4,596,600
Other Current Liabilities
4,034,000
2,975,000
2,773,000
2,294,800
Current Deferred Liabilities
1,180,000
657,000
540,000
492,200
Current Deferred Revenue
1,180,000
657,000
540,000
492,200
Current Debt And Capital Lease Obligation
781,000
272,000
614,000
295,600
Current Capital Lease Obligation
62,000
47,000
45,000
45,000
Current Debt
719,000
225,000
569,000
250,600
Other Current Borrowings
319,000
225,000
569,000
250,600
Current Notes Payable
400,000
0
Pensionand Other Post Retirement Benefit Plans Current
486,000
375,000
332,000
299,100
Current Provisions
771,000
1,616,000
184,000
880,300
Payables And Accrued Expenses
1,042,000
419,000
513,000
334,600
Current Accrued Expenses
52,000
46,000
54,000
48,100
Interest Payable
33,000
27,000
33,000
33,200
Payables
990,000
373,000
459,000
286,500
Other Payable
2,264,600
1,470,700
Accounts Payable
990,000
373,000
459,000
286,500
Total Assets
29,991,000
17,612,000
14,883,000
13,973,500
Total Non Current Assets
21,377,000
10,688,000
9,753,000
8,977,500
Other Non Current Assets
748,000
385,000
301,000
230,900
Investments And Advances
19,000
21,000
22,400
31,000
Goodwill And Other Intangible Assets
19,993,000
9,784,000
8,962,000
8,269,400
Other Intangible Assets
4,906,000
1,814,000
1,621,000
1,595,200
Goodwill
15,087,000
7,970,000
7,341,000
6,674,200
Net PPE
636,000
519,000
469,000
454,800
Accumulated Depreciation
-306,000
-272,000
-254,000
-237,000
Gross PPE
942,000
791,000
723,000
691,800
Leases
88,000
73,000
62,000
61,300
Other Properties
198,800
214,900
197,000
Machinery Furniture Equipment
448,000
382,000
345,000
307,200
Buildings And Improvements
269,000
200,000
199,000
214,900
Land And Improvements
137,000
136,000
117,000
108,400
Current Assets
8,614,000
6,924,000
5,130,000
4,996,000
Other Current Assets
484,000
364,000
314,000
202,300
Restricted Cash
2,471,000
1,827,000
1,603,000
1,383,200
Prepaid Assets
980,000
520,000
462,000
393,200
Receivables
3,600,000
3,538,000
2,040,000
2,355,300
Other Receivables
1,515,000
1,116,000
1,125,000
881,400
Accounts Receivable
2,085,000
2,422,000
915,000
1,473,900
Cash Cash Equivalents And Short Term Investments
1,079,000
675,000
711,000
662,000
Other Short Term Investments
10,000
11,000
12,000
12,900
Cash And Cash Equivalents
1,079,000
675,000
700,000
650,000
Cash Flow
2025
2024
2023
2022
2021
Free Cash Flow
1,382,000
1,092,000
941,000
829,000
Repurchase Of Capital Stock
-142,000
-55,000
-40,000
-123,000
Repayment Of Debt
-825,000
-1,069,000
-571,000
-411,000
Issuance Of Debt
4,642,000
1,099,000
420,000
2,350,000
Issuance Of Capital Stock
4,315,000
0
0
Capital Expenditure
-68,000
-82,000
-69,000
-52,000
Interest Paid Supplemental Data
284,000
195,000
186,000
120,000
Income Tax Paid Supplemental Data
371,000
302,000
218,000
122,000
End Cash Position
3,815,000
2,502,000
2,303,000
2,033,000
Beginning Cash Position
2,502,000
2,303,000
2,033,000
1,470,000
Effect Of Exchange Rate Changes
64,000
-13,000
34,000
-131,000
Changes In Cash
1,249,000
212,000
236,000
694,000
Financing Cash Flow
7,713,000
-64,000
-187,000
1,726,000
Cash Flow From Continuing Financing Activities
7,713,000
-64,000
-187,000
1,726,000
Net Other Financing Charges
-132,000
71,000
99,000
-8,000
Proceeds From Stock Option Exercised
48,000
44,000
40,000
38,000
Cash Dividends Paid
-193,000
-154,000
-135,000
-120,000
Common Stock Dividend Paid
-193,000
-154,000
-135,000
-120,000
Net Common Stock Issuance
4,173,000
-55,000
-40,000
-123,000
Common Stock Payments
-142,000
-55,000
-40,000
-123,000
Common Stock Issuance
4,315,000
0
0
Net Issuance Payments Of Debt
3,817,000
30,000
-151,000
1,939,000
Net Short Term Debt Issuance
100,000
0
0
Short Term Debt Payments
-320,000
-350,000
0
Short Term Debt Issuance
420,000
350,000
0
Net Long Term Debt Issuance
3,817,000
30,000
-151,000
1,939,000
Long Term Debt Payments
-825,000
-1,069,000
-571,000
-411,000
Long Term Debt Issuance
4,642,000
1,099,000
420,000
2,350,000
Investing Cash Flow
-7,914,000
-898,000
-587,000
-1,913,000
Cash Flow From Continuing Investing Activities
-7,914,000
-898,000
-587,000
-1,913,000
Net Other Investing Changes
-1,000
4,000
6,000
Net Investment Purchase And Sale
4,000
6,000
7,000
-1,600
Sale Of Investment
11,000
13,200
7,000
10,800
Purchase Of Investment
-7,000
-7,200
0
-12,400
Net Business Purchase And Sale
-7,845,000
-820,000
-524,000
-1,868,000
Sale Of Business
9,000
70,000
107,000
60,000
Purchase Of Business
-7,854,000
-890,000
-631,000
-1,928,000
Net PPE Purchase And Sale
-68,000
-82,000
-69,000
-52,000
Sale Of PPE
106,600
60,400
16,600
Purchase Of PPE
-68,000
-82,000
-69,000
-52,000
Operating Cash Flow
1,450,000
1,174,000
1,010,000
881,000
Cash Flow From Continuing Operating Activities
1,450,000
1,174,000
1,010,000
881,000
Change In Working Capital
-47,000
-105,000
-25,000
-16,000
Change In Other Working Capital
177,000
115,000
50,000
20,000
Change In Other Current Liabilities
-1,288,000
1,444,000
-793,000
651,000
Change In Other Current Assets
-44,000
-98,000
-117,000
-18,000
Change In Payables And Accrued Expense
29,000
-12,000
303,000
161,000
Change In Accrued Expense
18,000
35,000
43,000
37,000
Change In Payable
11,000
-47,000
260,000
124,000
Change In Account Payable
11,000
-47,000
260,000
124,000
Change In Prepaid Assets
-182,000
-58,000
-68,000
-1,000
Change In Receivables
1,261,000
-1,496,000
600,000
-829,000
Changes In Account Receivables
1,261,000
-1,496,000
600,000
-829,000
Other Non Cash Items
28,000
-30,000
-3,000
-66,000
Stock Based Compensation
93,000
101,000
89,000
66,000
Unrealized Gain Loss On Investment Securities
-54,000
0
0
Amortization Of Securities
3,500
200
100
Deferred Tax
-7,000
13,000
12,000
43,000
Deferred Income Tax
-7,000
13,000
12,000
43,000
Depreciation Amortization Depletion
367,000
222,000
206,000
186,000
Depreciation And Amortization
367,000
222,000
206,000
186,000
Amortization Cash Flow
312,000
178,000
166,000
147,000
Amortization Of Intangibles
312,000
178,000
166,000
147,000
Depreciation
55,000
44,000
40,000
39,000
Operating Gains Losses
3,000
-29,000
-140,000
-4,000
Gain Loss On Investment Securities
3,000
-29,000
-140,000
-4,000
Net Foreign Currency Exchange Gain Loss
200
-600
500
Gain Loss On Sale Of Business
-140,300
-3,600
-7,100
Net Income From Continuing Operations
1,067,000
1,002,000
871,000
672,000
4/7
Graham Score
Enterprising Investor
Requires deeper research. Suited for active investors.
Graham's Fair Value
$51.30
Margin of Safety
0%
Market Cap / Net Assets
1.6x
Net Assets: $12.6B
Warren's Owner Earnings
$1.5B
Latest fiscal year
Graham's 7 Criteria
Defensive Investor Checklist
4/7 — Enterprising Investor
✅
Adequate Size
Graham required companies large enough to withstand economic downturns. This threshold ($1.5B) is inflation-adjusted from Graham's original $100M — virtually all S&P 500 companies pass this today.
$5.8B
vs > $1.5B revenue
❌
Strong Financial Condition
Current assets must be at least twice current liabilities. Note: highly profitable companies (Apple, Domino's) often run negative or low working capital deliberately — they collect cash fast and stretch payables. A failing score here is not always a warning sign.
1.04x
vs Current Ratio > 2.0x
✅
Earnings Stability
Graham required uninterrupted positive earnings. Any loss year is a red flag for defensive investors. Growth companies and cyclicals may show occasional losses during investment cycles or downturns without being fundamentally unsound.
No loss years (4 yrs data)
vs No negative EPS years
✅
Dividend Record
Graham valued dividends as evidence of financial discipline and shareholder alignment. Many excellent modern businesses (Alphabet, Amazon, Berkshire Hathaway) pay no dividend, preferring to reinvest cash at high rates of return. Failing this criterion does not indicate a poor business — it may indicate a high-growth one.
1.07%
vs Uninterrupted dividends
✅
Earnings Growth
EPS grew from $2.37 to $3.16 over 3 years. Graham's 33% threshold was set over a 10-year period. Measured over fewer years (as here), the bar is proportionally lower. Share buybacks can also inflate EPS growth without reflecting underlying business improvement.
+33.3% EPS growth
vs > 33% EPS growth
❌
Moderate P/E Ratio
Graham's 15x P/E threshold was calibrated to 1960s market averages when interest rates were higher. Today's lower rate environment structurally supports higher multiples — the S&P 500 long-run average P/E is now closer to 20–25x. A stock trading at 20x is not automatically speculative in the modern context.
19.3x
vs P/E ≤ 15.0x
❌
Moderate Price-to-Book
Graham's 1.5x P/B threshold made sense when most company value was tangible. Today, intangible assets — brand, software, patents, network effects — rarely appear on the balance sheet. A high P/B in tech, pharma, or consumer brands often reflects intangible value, not overvaluation. P/FCF or EV/EBITDA are more reliable for asset-light businesses.
1.60x P/B (P/E×P/B: 30.7)
vs P/B ≤ 1.5x | P/E × P/B ≤ 22.5
Graham's 7 Criteria — Explained
What each criterion measures and why it matters.
✅ Adequate Size — $5.8Bvs > $1.5B revenue
Graham required companies large enough to withstand economic downturns. This threshold ($1.5B) is inflation-adjusted from Graham's original $100M — virtually all S&P 500 companies pass this today.
"The minimum size of an enterprise should be not less than $100 million of annual sales."
❌ Strong Financial Condition — 1.04xvs Current Ratio > 2.0x
Current assets must be at least twice current liabilities. Note: highly profitable companies (Apple, Domino's) often run negative or low working capital deliberately — they collect cash fast and stretch payables. A failing score here is not always a warning sign.
"For industrial companies, current assets should be at least twice current liabilities."
✅ Earnings Stability — No loss years (4 yrs data)vs No negative EPS years
Graham required uninterrupted positive earnings. Any loss year is a red flag for defensive investors. Growth companies and cyclicals may show occasional losses during investment cycles or downturns without being fundamentally unsound.
"The company should have shown no deficit in the past ten years."
✅ Dividend Record — 1.07%vs Uninterrupted dividends
Graham valued dividends as evidence of financial discipline and shareholder alignment. Many excellent modern businesses (Alphabet, Amazon, Berkshire Hathaway) pay no dividend, preferring to reinvest cash at high rates of return. Failing this criterion does not indicate a poor business — it may indicate a high-growth one.
"Some current dividend payments — for at least the past 20 years."
EPS grew from $2.37 to $3.16 over 3 years. Graham's 33% threshold was set over a 10-year period. Measured over fewer years (as here), the bar is proportionally lower. Share buybacks can also inflate EPS growth without reflecting underlying business improvement.
"A minimum increase of at least one-third in per-share earnings over ten years."
❌ Moderate P/E Ratio — 19.3xvs P/E ≤ 15.0x
Graham's 15x P/E threshold was calibrated to 1960s market averages when interest rates were higher. Today's lower rate environment structurally supports higher multiples — the S&P 500 long-run average P/E is now closer to 20–25x. A stock trading at 20x is not automatically speculative in the modern context.
"The price-earnings ratio should be no more than 15 times average earnings."
Graham's 1.5x P/B threshold made sense when most company value was tangible. Today, intangible assets — brand, software, patents, network effects — rarely appear on the balance sheet. A high P/B in tech, pharma, or consumer brands often reflects intangible value, not overvaluation. P/FCF or EV/EBITDA are more reliable for asset-light businesses.
"The price should not be more than 1½ times book value. P/E × P/B ≤ 22.5."
These metrics estimate what Brown & Brown, Inc. is worth based on fundamentals — independent of what the market prices it at.
Graham's Fair Value and NCAV are conservative floors.
EPV assumes zero growth. These are reference points, not price targets.
Net Current Asset Value
$-25.97
Negative NCAV — liabilities exceed current assets. Common in capital-return businesses (buybacks, debt-funded dividends) and capital-intensive industries. Not automatically a warning sign.
"Buy at two-thirds of net current assets." — Graham
Earnings Power Value
$49.24
Per share, no-growth floor. Compare to current price.
ROIC — Return on Invested Capital
5.5%
Return on Invested Capital — Buffett's preferred measure for asset-light businesses. ROIC > 15% consistently signals a durable competitive advantage (moat). More meaningful than P/B for software, pharma, and consumer brand companies where most value is intangible and off-balance-sheet.
Cash Flow Analysis
Metric
2025
2024
2023
2022
2021
Capital Expenditure % of Net Income
6.5%
8.3%
7.9%
7.7%
N/A
Repurchase of Capital Stock
-$142M
-$55M
-$40M
-$123M
N/A
Free Cash Flow
$1.4B▲
$1.1B▲
$941M▲
$829M•
N/A•
Warren's Owner Earnings
$1.5B
$1.3B
$1.1B
$910M
N/A
Peers & Industry
No auto-detected peers for Insurance Brokers. You can manually compare BRO against any stock using the Compare tool.
"The management of a business is its most important single factor — more important than market position, patents, or financial structure."
— Benjamin Graham
Capital Allocation & Alignment
Insider Ownership
13.11%
High — management has strong skin in the game
Return on Equity (ROE)
8.4%
Adequate — returns are moderate
Return on Assets (ROA)
3.5%
Fair — average asset utilization
Share Buybacks (Latest Year)
$142M
Management is returning capital to shareholders via buybacks
Debt Trend YoY
+95.0% YoY
Debt is growing — management is leveraging up
Leadership Team
Powell Brown
CEO, President & Director
Age 57
Pay: $5,682,315
0.539% of net income
Andrew Watts CPA
Executive VP, CFO & Treasurer
Age 56
Pay: $2,458,973
0.233% of net income
Stephen Patrick Hearn
President of Retail Segment, Executive VP & COO
Age 59
Pay: $2,604,694
0.247% of net income
Chris Walker
Executive VP & Chairman of Specialty Distribution Segment
Age 67
Pay: $2,508,425
0.238% of net income
Barrett Brown
Executive VP & President of Retail Segment (Leave of Absence)
Age 52
Pay: $2,804,777
0.266% of net income
Top Institutional Holders
Institution
% Owned
Shares
Blackrock Inc.
6.47%
21,916,747
Vanguard Capital Management LLC
5.58%
18,921,240
Capital World Investors
4.87%
16,493,922
FMR, LLC
4.74%
16,050,696
Principal Financial Group, Inc.
4.61%
15,608,720
Vanguard Portfolio Management LLC
4.30%
14,586,476
State Street Corporation
4.06%
13,776,462
First Eagle Investment Management, LLC
2.60%
8,823,162
Risk Analysis
Beta (Market Risk)
0.62
Low volatility — more stable than the market
Short Interest
6.4% of float
Moderate short interest
Debt-to-Equity
0.64x
Conservative balance sheet — low financial risk
Current Ratio
1.02x
Adequate liquidity
52-Week Price Range
Low: $53.81Current: $59.10High: $111.10
Currently at 9% of 52-week range
Brown & Brown, Inc. (BRO) fundamental analysis — Overall grade C based on profitability, financial health, valuation and cash flow. Graham's
Fair Value: $51.30. Margin of safety: 0%. Gross profit margin: 49.1%. Operating margin: 26.1%. Net margin: 18.3%. Market cap: $20.0B. Sector: Financial Services. Industry: Insurance Brokers. Analysis powered by 360investing — free fundamental stock analysis based on Benjamin Graham and Warren Buffett
principles.
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and may be delayed, inaccurate, or incomplete. Past performance is not indicative of future results. Analysis, scores, and valuations are algorithmic and do not represent professional investment recommendations. Always conduct your own due
diligence and consult a qualified financial adviser before making any investment decision. Use of this tool constitutes acceptance that 360investing and its operators bear no liability for decisions made based on information presented here.