We came across a bullish thesis on Brown & Brown, Inc. (BRO) on Substack by Bulls On Parade. In this article, we will summarize the bulls’ thesis on BRO. Brown & Brown, Inc. (BRO)'s share was trading at $118.86 as of April 11^th. BRO’s trailing and forward P/E were 34.35 and 28.01 respectively according to Yahoo Finance.

A successful independent agent or broker discussing the benefits of life and health insurance with a customer.

Brown & Brown, Inc. (BRO) may not be flashy, but it’s quietly become one of the most consistent compounders in the insurance space. Founded in 1939 in Daytona Beach, Florida, the company has grown from a small-town agency into a $31 billion market cap powerhouse with a presence across the U.S., Canada, and the U.K. Still led by the Brown family—Hyatt Brown as Chairman and Powell Brown as CEO—BRO has maintained its focused, independent, and pragmatic culture while methodically scaling its brokerage platform. Its business model is straightforward yet durable: as an insurance broker, not an insurer, it connects clients with carriers through four key segments—Retail, National Programs, Wholesale Brokerage, and Services. The Retail business remains its core driver, generating the majority of revenues by serving businesses of all sizes with property, casualty, and employee benefits coverage.

The company thrives by leveraging its independence to offer clients more choice and better pricing than tied agents. Its real advantage, though, lies in relationships—with clients, carriers, and acquired partners. Brown & Brown has executed over 500 acquisitions since the 1990s, steadily rolling up smaller brokers while preserving their local autonomy. This disciplined acquisition strategy, combined with consistent 9–10% organic revenue growth, has created a resilient, decentralized, and highly profitable operation. Capital allocation is a strength: the company prioritizes organic growth first, then uses excess cash for acquisitions—15 deals closed in 2024 alone with $311 million in annualized revenue added—while keeping debt modest at 1.5x EBITDA. Dividends are paid, but growth remains the priority, with 31 straight years of dividend increases underscoring the company’s consistency.

Recent performance reinforces its momentum. In Q4 2024, revenue rose 11% to $1.19 billion, driven by 9.5% organic growth and a 14.8% organic surge in Retail. EPS beat estimates at $0.86, thanks to higher commissions, rising fees, and growing investment income. Operating cash flow reached $1.2 billion, and margins expanded to 34.3%, demonstrating scalable profitability. Despite a premium valuation at ~29x trailing earnings, analysts expect 10.5% EPS growth and 9–10% revenue growth over the next few years. While the stock isn’t cheap, it offers a rare blend of quality, efficiency, and long-term compounding power. For investors willing to pay up for consistency, operational discipline, and a long-term mindset, BRO presents a compelling case as a quiet empire-builder that delivers steady returns with minimal drama.

Brown & Brown, Inc. (BRO) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 39 hedge fund portfolios held BRO at the end of the fourth quarter which was 35 in the previous quarter. While we acknowledge the risk and potential of BRO as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than BRO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.