In its concerted effort to enhance shareholder value, the
board of directors of
Brown & Brown, Inc
) authorized the company to repurchase upto $25 million worth of
The company can buy back the shares over the next two years.
The new authorization by Brown & Brown is duly supported by
the company's solid financial position, with cash and cash
equivalents of $203 million as of the end of 2013. Retained
earnings at year end also stood solid at $1.6 billion (up 11%
year over year). A sustained solid operational performance
continues to cushion Brown & Brown's sturdy financial
position. Share repurchases are broadly intended to lower
dilution from the employee equity incentive plans.
Besides the share buyback authorization, in Oct 2013, the board
of directors also approved an 11.1% increase in its quarterly
dividend, in a bid to share more profits with BRO's shareholders.
Several insurers are in the news presently for their efforts to
enhance shareholder value. Recently, the board of
Arthur J Gallagher & Co.
) approved a 2.9% increase in its quarterly cash dividend to 36
cents per share. The board of directors of
Erie Indemnity Co.
) also approved a dividend hike on both Class A and Class B
shares. While a 7.2% dividend hike was approved for Class A
shares, a 3.2% hike was approved for Class B shares.
Last month, Brown & Brown reported operating net income of 32
cents per share for the fourth quarter of 2013, improving 10.3%
year over year, driven by solid performance across three business
divisions. However, results missed the Zacks Consensus Estimate
by 3 cents.
Brown & Brown presently carries a Zacks Rank #3 (Hold). With
the news of the share buyback authorization poised to boost
investor confidence in the stock as well as add to the bottom
line, we expect analysts to raise their estimates and exert
upward pressure on the Zacks Rank. A better-ranked stock worth
) with a Zacks Rank #2 (Buy).
GALLAGHER ARTHU (AJG): Free Stock Analysis
BROWN & BROWN (BRO): Free Stock Analysis
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