Critical Analysis: Brown & Brown (NYSE:BRO) and TWFG (NASDAQ:TWFG)

Brown & Brown (NYSE:BRO) and TWFG (NASDAQ:TWFG) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, valuation, analyst recommendations and dividends.

Analyst Recommendations

This is a breakdown of recent ratings for Brown & Brown and TWFG, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Brown & Brown	1	4	7	0	2.50
TWFG	0	3	6	0	2.67

Brown & Brown currently has a consensus price target of $105.67, indicating a potential downside of 0.33%. TWFG has a consensus price target of $27.86, indicating a potential downside of 7.33%. Given Brown & Brown’s higher possible upside, analysts plainly believe Brown & Brown is more favorable than TWFG.

Insider and Institutional Ownership

71.0% of Brown & Brown shares are held by institutional investors. 17.0% of Brown & Brown shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Brown & Brown and TWFG’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Brown & Brown	21.95%	17.00%	6.45%
TWFG	N/A	N/A	N/A

Earnings and Valuation

This table compares Brown & Brown and TWFG”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Brown & Brown	$4.45 billion	6.80	$870.50 million	$3.25	32.62
TWFG	$180.42 million	2.19	$26.10 million	N/A	N/A

Brown & Brown has higher revenue and earnings than TWFG.

Summary

Brown & Brown beats TWFG on 10 of the 11 factors compared between the two stocks.

About Brown & Brown

Brown & Brown, Inc. markets and sells insurance products and services in the United States, Canada, Ireland, the United Kingdom, and internationally. It operates through four segments: Retail, National Programs, Wholesale Brokerage, and Services. The Retail segment provides property and casualty, employee benefits insurance products, personal insurance products, specialties insurance products, risk management strategies, loss control survey and analysis, consultancy, and claims processing services. It serves commercial, public and quasi-public entities, professional, and individual customers. The National Programs segment offers professional liability and related package insurance products for dentistry, legal, eyecare, insurance, financial, physicians, real estate title professionals, as well as supplementary insurance products related to weddings, events, medical facilities, and cyber liabilities. This segment also provides public entity-related and specialty programs through a network of independent agents; and program management services for insurance carrier partners. The Wholesale Brokerage segment markets and sells excess and surplus commercial and personal lines insurance through independent agents and brokers. The Services segment offers third-party claims administration and medical utilization management services in the workers' compensation and all-lines liability arenas, Medicare Set-aside, Social Security disability, Medicare benefits advocacy, and claims adjusting services. Brown & Brown, Inc. was founded in 1939 and is headquartered in Daytona Beach, Florida.

About TWFG

TWFG, Inc. operates an independent distribution platform for personal and commercial insurance products in the United States. Its personal and commercial insurance products include auto, home, renters, life, health, motorcycle, umbrella, boat, recreational vehicle, flood, wind, event, luxury item, general liability, property, business auto, workers’ compensation, business owner policy, and professional liability insurance products, as well as commercial bonds and group benefits. The company was founded in 2001 and is based in The Woodlands, Texas. TWFG, Inc. operates as a subsidiary of Bunch Family Holdings, LLC.