Brown & Brown (BRO) Unit Acquires Assets Of ALMEA Insurance

Brown & Brown, Inc. (NYSE:BRO) announced that Brown & Brown of Oregon, LLC has acquired substantially all of the assets of ALMEA Insurance’s Vancouver, WA location.

Founded in 1949, ALMEA Insurance offers an array of personal and business insurance products and services in Washington and Oregon and generates about $2 million in annual revenues.

Brown & Brown and its subsidiaries continuously make strategic acquisitions to expand globally, add capabilities and boost operations. Also, these strategic buyouts help Brown & Brown to increase commissions and fees, which, in turn, drive revenues.

The recent acquisition is the company’s first buyout in the ongoing quarter. The company made seven acquisitions in the first quarter of 2019. Year 2018 was the biggest ever for Brown and Brown in terms of acquisition activity with Hays Companies being the most significant buyout. Brown & Brown estimates Hays to deliver $210 million to $220 million of annual revenues, $47 million to $53 million of EBITDAC and net income per share of 2 cents to 3 cents in 2019.

Shares of this Zacks Rank #3 (Hold) insurance broker have rallied 11.5% year to date, underperforming its industry’s increase of 19%. We expect the company’s sustained operational performance, higher commissions and fees plus a solid capital position to push the stock higher in the near term.

Brown & Brown is set to report first-quarter results on Apr 22. The Zacks Consensus Estimate is pegged at 36 cents, indicating year-over-year increase of 9.1%. Our proven conclusively shows that the company is likely to beat on earnings this time. This is because it has the right combination of Zacks Rank #3 (Hold) and an Earnings ESP of +4.02%.

Other Insurers on an Acquisition Spree

There have been a number of significant acquisitions in the insurance domain of late. Recently, Arthur J. Gallagher & Co. (NYSE:AJG) acquired specialist UK insurance broker Stackhouse Poland Group Limited. Earlier this month, Marsh & McLennan Companies, Inc.’s (NYSE:MMC) subsidiary Marsh & McLennan Agency LLC (“MMA”) reached an agreement to buy Centurion, which is located in Plymouth Meeting, PA.

A Stock to Consider

A better-ranked stock from the insurance industry is Hallmark Financial Services, Inc. (NASDAQ:HALL) , sporting Zacks Rank #1 (Strong Buy). Hallmark Financial underwrites, markets, distributes and services property/casualty insurance products to businesses and individuals in the United States. The company delivered four-quarter average positive earnings surprise of 91.28%.

You can see the complete list of today’s Zacks #1 Rank stocks here.

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