Up to date on March 1st, 2025 by Felix Martinez
The Dividend Aristocrats are a number of the finest dividend shares an investor will discover. They’re firms 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 development shares round. Because of this, we created a downloadable spreadsheet of all 69 Dividend Aristocrats, together with vital metrics equivalent to price-to-earnings ratios and dividend yields.
You’ll be able to obtain the Excel sheet of all 69 Dividend Aristocrats by clicking the hyperlink under:
Disclaimer: Certain Dividend just isn’t affiliated with S&P International in any approach. S&P International owns and maintains The Dividend Aristocrats Index. The knowledge on this article and downloadable spreadsheet relies on Certain Dividend’s personal evaluate, 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 based mostly. Not one of the data on this article or spreadsheet is official knowledge from S&P International. Seek the advice of S&P International for official data.
Every year, we evaluate the entire Dividend Aristocrats. The subsequent 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 listing.
BRO has now elevated its dividend for 31 consecutive years. This text will focus on the corporate’s enterprise mannequin, development outlook, and whether or not we view it as a purchase immediately.
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 stage of insider possession.
The corporate employs about 17,000 individuals and generated about $4.7 billion in income final yr. It operates by 4 segments: Retail, Nationwide Packages, 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 properly towards 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 provides the corporate an everlasting alternative to proceed rising its enterprise for the foreseeable future.
Development Prospects
Brown & Brown has a exceptional development observe report that features a decade-long compound annual earnings development fee of greater than 14%. The corporate’s e-book worth per frequent share has grown at an analogous fee, 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 corporations 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 sturdy monetary efficiency for the fourth quarter of 2024, with whole revenues reaching $1.2 billion, reflecting a 15.4% improve in comparison with the earlier yr. Natural income development was 13.8%, pushed by increased commissions and charges. Nonetheless, earnings earlier than taxes dropped by 22.8% to $275 million on account of a one-time acquire recorded in 2023 from the sale of sure enterprise items. Diluted internet earnings 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 powerful development estimate of $4.15 in earnings-per-share, as the corporate continues to see strong income development driving increasing margins.
We count on BRO to generate 9% annual earnings-per-share development 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 provides the corporate an everlasting alternative to proceed rising its enterprise for the foreseeable future.
BRO can be modestly recession-resistant. For instance, BRO’s aggressive benefits enable it to keep up constant profitability every year, even throughout recessions.
BRO’s earnings-per-share throughout the Nice Recession are under:
- 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% improve)
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% improve yr over yr.
Valuation & Anticipated Returns
Primarily based on our anticipated EPS of $4.15 for 2025, BRO inventory trades for a price-to-earnings ratio of 28.6, utilizing immediately’s inventory value of ~$118. BRO held a median price-to-earnings ratio of 23 over the previous 10 years.
At present’s a number of is modestly above our truthful P/E of 24, implying shares seem considerably overvalued at their present value ranges.
If the inventory experiences a decline within the valuation a number of to our truthful P/E of 24.0, annual shareholder returns could be diminished by 1.7% yearly over the following 5 years.
Fortuitously, earnings development and dividends will positively affect 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 development
- 0.5% dividend yield
- -1.7% a number of contraction
On this projection, whole annualized shareholder returns may attain 7.8% by 2030. This can be a passable anticipated fee of return for this firm, however one that’s restricted by the inventory’s excessive valuation.
Remaining Ideas
BRO has endured a lot 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 firms have this means, which makes this firm a uncommon dividend development inventory.
BRO has a management place in its insurance coverage business and sturdy aggressive benefits. These components have the corporate positioned for development in future years, making it extremely seemingly that the corporate will proceed to extend its dividend.
The corporate is a high-quality enterprise and a dividend development firm. Whereas the inventory just isn’t essentially overvalued, its wealthy a number of prevents it from incomes a purchase ranking from Certain Dividend presently. Accordingly, we have now assigned the inventory a maintain ranking at its present value.
Moreover, the next Certain Dividend databases include probably the most dependable dividend growers in our funding universe:
In case you’re searching for shares with distinctive dividend traits, take into account the next Certain Dividend databases:
The most important home inventory market indices are one other stable useful resource for locating funding concepts. Certain Dividend compiles the next inventory market databases and updates them month-to-month:
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