Up to date on March 1st, 2025 by Felix Martinez
The Dividend Aristocrats are among the finest dividend shares an investor will discover. They’re corporations within the S&P 500 Index which have had 25+ consecutive years of dividend will increase.
We consider the Dividend Aristocrats are among the many highest-quality dividend progress shares round. For that reason, we created a downloadable spreadsheet of all 69 Dividend Aristocrats, together with necessary metrics equivalent to price-to-earnings ratios and dividend yields.
You may obtain the Excel sheet of all 69 Dividend Aristocrats by clicking the hyperlink beneath:
Disclaimer: Certain Dividend just isn’t affiliated with S&P International in any means. S&P International owns and maintains The Dividend Aristocrats Index. The data on this article and downloadable spreadsheet relies on Certain Dividend’s personal evaluation, abstract, and evaluation of the S&P 500 Dividend Aristocrats ETF (NOBL) and different sources, and is supposed to assist particular person buyers higher perceive this ETF and the index upon which it’s primarily based. Not one of the info on this article or spreadsheet is official knowledge from S&P International. Seek the advice of S&P International for official info.
Annually, we evaluation the entire Dividend Aristocrats. The following inventory within the sequence is an insurance coverage dealer large, Brown & Brown Inc. (BRO). BRO may not be a well-known inventory for many buyers, however it has definitely earned its place on the checklist.
BRO has now elevated its dividend for 31 consecutive years. This text will focus on the corporate’s enterprise mannequin, progress outlook, and whether or not we view it as a purchase at present.
Enterprise Overview
Brown & Brown Inc. is a number one insurance coverage brokerage agency that gives danger administration options to each people and companies, with a concentrate on property & casualty insurance coverage. Brown & Brown has a notably excessive degree of insider possession.
The corporate employs about 17,000 folks and generated about $4.7 billion in income final yr. It operates by 4 segments: Retail, Nationwide Applications, Wholesale Brokerage, and Companies.
The corporate has been diversifying its enterprise segments all through the years, permitting it to not be 100% depending on one enterprise phase. Thus, these segments have carried out very effectively in opposition to their friends, permitting BRO to attain “better of breed” standing in its business.
Brown & Brown’s aggressive benefit comes from its willingness to execute small and frequent acquisitions. This growth-by-acquisition technique offers the corporate a permanent alternative to proceed rising its enterprise for the foreseeable future.
Progress Prospects
Brown & Brown has a outstanding progress monitor report that features a decade-long compound annual earnings progress price of greater than 14%. The corporate’s e-book worth per frequent share has grown at the same price, increasing at ~11% per yr over the past ten years.
The expansion technique is each easy and sustainable. Over time, the corporate has actively acquired smaller insurance coverage brokerage companies and built-in them into its bigger working base.
Brown & Brown posted fourth-quarter and full-year monetary outcomes on January twenty seventh, 2025. The corporate reported robust monetary efficiency for the fourth quarter of 2024, with whole revenues reaching $1.2 billion, reflecting a 15.4% enhance in comparison with the earlier yr. Natural income progress was 13.8%, pushed by larger commissions and costs. Nonetheless, revenue earlier than taxes dropped by 22.8% to $275 million as a consequence of a one-time achieve recorded in 2023 from the sale of sure enterprise items. Diluted internet revenue per share fell 22.3% to $0.73, whereas the adjusted determine elevated by 24.6% to $0.86. The corporate’s EBITDAC-adjusted rose 22.6% to $390 million, with an improved margin of 32.9%.
Supply: Investor Presentation
We begin 2025 with a robust progress estimate of $4.15 in earnings-per-share, as the corporate continues to see sturdy income progress driving increasing margins.
We count on BRO to generate 9% annual earnings-per-share progress over the following 5 years.
Aggressive Benefits & Recession Efficiency
Brown & Brown’s aggressive benefit comes from its willingness to execute small and frequent acquisitions. This growth-by-acquisition technique offers the corporate a permanent alternative to proceed rising its enterprise for the foreseeable future.
BRO can also be modestly recession-resistant. For instance, BRO’s aggressive benefits permit it to keep up constant profitability every year, even throughout recessions.
BRO’s earnings-per-share throughout the Nice Recession are beneath:
- 2007 earnings-per-share of $0.68
- 2008 earnings-per-share of $0.59 (13% decline)
- 2009 earnings-per-share of $0.54 (8% decline)
- 2010 earnings-per-share of $0.56 (4% enhance)
Additional, throughout the COVID-19 pandemic, earnings grew from $1.40 per share in 2019 to $1.67 per share in 2020, representing a 19% enhance yr over yr.
Valuation & Anticipated Returns
Based mostly on our anticipated EPS of $4.15 for 2025, BRO inventory trades for a price-to-earnings ratio of 28.6, utilizing at present’s inventory worth of ~$118. BRO held a mean price-to-earnings ratio of 23 over the previous 10 years.
In the present day’s a number of is modestly above our truthful P/E of 24, implying shares seem considerably overvalued at their present worth ranges.
If the inventory experiences a decline within the valuation a number of to our truthful P/E of 24.0, annual shareholder returns can be decreased by 1.7% yearly over the following 5 years.
Fortuitously, earnings progress and dividends will positively influence future returns. First, we count on the corporate to develop earnings-per-share by 9% per yr by 2030.
The inventory additionally has a dividend yield of 0.6%. Placing all of it collectively, a breakdown of our anticipated future returns is as follows:
- 9.0% anticipated earnings-per-share progress
- 0.5% dividend yield
- -1.7% a number of contraction
On this projection, whole annualized shareholder returns might attain 7.8% by 2030. This can be a passable anticipated price of return for this firm, however one that’s restricted by the inventory’s excessive valuation.
Closing Ideas
BRO has endured plenty of challenges over the previous decade, together with the Nice Recession of 2008-2009 and the coronavirus pandemic of 2020. And but, it continued to boost its dividend every year. Only a few corporations have this potential, which makes this firm a uncommon dividend progress inventory.
BRO has a management place in its insurance coverage business and sturdy aggressive benefits. These elements have the corporate positioned for progress in future years, making it extremely possible that the corporate will proceed to extend its dividend.
The corporate is a high-quality enterprise and a dividend progress firm. Whereas the inventory just isn’t essentially overvalued, its wealthy a number of prevents it from incomes a purchase ranking from Certain Dividend right now. Accordingly, now we have assigned the inventory a maintain ranking at its present worth.
Moreover, the next Certain Dividend databases comprise probably the most dependable dividend growers in our funding universe:
If you happen to’re searching for shares with distinctive dividend traits, think about the next Certain Dividend databases:
The key home inventory market indices are one other strong useful resource for locating funding concepts. Certain Dividend compiles the next inventory market databases and updates them month-to-month:
Thanks for studying this text. Please ship any suggestions, corrections, or inquiries to [email protected].
