Where does Brown & Brown Insurance rank after its 8% announced dividend increase?

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Brown & Brown Insurance Inc. (BRO) announced a regular quarterly dividend of $0.135, an 8 percent increase from the prior rate of $0.125 per share. The dividend will be paid at the new higher rate on November 9, 2016, to shareholders of record at close of business on October 28, 2016. Brown & Brown Insurance Inc. is currently priced at $37.26.

Listed in the table below are the quarterly dividend payments since 2010. Our analysis of Brown & Brown Insurance Inc. as a Top 100 Dividend Stock candidate is listed below;

Date Quarterly Dividend
10/28/2016 0.135
8/5/2016 0.123
5/5/2016 0.123
2/1/2016 0.123
11/2/2015 0.123
8/5/2015 0.11
4/30/2015 0.11
2/2/2015 0.11
10/29/2014 0.11
8/6/2014 0.1
5/2/2014 0.1
2/3/2014 0.1
10/28/2013 0.1
8/5/2013 0.09
4/29/2013 0.09
1/28/2013 0.09
11/5/2012 0.09
8/6/2012 0.085
5/2/2012 0.085
1/30/2012 0.085
10/31/2011 0.085
8/8/2011 0.08
5/2/2011 0.08
1/31/2011 0.08
11/1/2010 0.08
8/2/2010 0.078
5/3/2010 0.078
2/1/2010 0.078

Analysis of Brown & Brown Insurance Inc. is based upon our five key criteria for the Top 100 list, which include; 

Category Value Score
Dividend Yield 1.32% 358
Dividend Growth (3-6 year avg) 9.4% 227
Forward P/E 19.59 193
S&P Financial Rating A 120
Beta 0.90 100
Total Score   998

Additional Information;

% Yield 3 Year Div. Growth Rate 6 Year Div. Growth Rate BV 2016 P/BV Ratio 10 yr P/BV Low 10 yr P/BV High 5 yr max Yield % 5 yr lowest Yield %
1.32% 10.4% 8.3% 16.8 2.22 2.22 5.32 1.76% 1.09%

Final Analysis;

  • Brown & Brown Insurance’s dividend yield is on average with that of the S&P 500 Index and is trading below its average historical dividend yield.
  • Brown & Brown Insurance maintains a 3 year dividend growth rate of 10.4%.
  • Brown & Brown Insurance has paid out a dividend consecutively for the past 21 years.
  • Brown & Brown Insurance is trading at a high forward P/E ratio and at a low price/book value (P/BV) ratio.  From a relative valuation perspective based upon P/BV, Brown & Brown Insurance is undervalued.
  • Brown & Brown Insurance maintains a credit rating of A. This is above investment grade, a positive.
  • Brown & Brown Insurance maintains a beta of 0.90, lower than the average company.

Based upon its low dividend yield, and high P/E ratio, Brown & Brown Insurance does not qualify as one of our Top 100 Dividend Stocks.

Brown & Brown Insurance Inc. Dividend Yield Chart (Click to enlarge) bro

Chart Explanation:  Dividend growth stocks may be viewed favorably when the current yield is above historical readings for the past 5 years.

Further information on dividend investing and evaluating dividend growth candidates can be found at http://seekingalpha.com/author/timothy-mcintosh/articles

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