Chubb (NYSE:CB) vs. Brown & Brown (NYSE:BRO) Financial Comparison

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

Analyst Ratings

This is a breakdown of recent ratings and price targets for Brown & Brown and Chubb, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Brown & Brown	1	13	6	1	2.33
Chubb	1	13	7	2	2.43

Brown & Brown presently has a consensus target price of $75.53, indicating a potential upside of 8.32%. Chubb has a consensus target price of $362.78, indicating a potential downside of 0.37%. Given Brown & Brown’s higher possible upside, equities analysts clearly believe Brown & Brown is more favorable than Chubb.

Dividends

Brown & Brown pays an annual dividend of $0.66 per share and has a dividend yield of 0.9%. Chubb pays an annual dividend of $4.08 per share and has a dividend yield of 1.1%. Brown & Brown pays out 20.9% of its earnings in the form of a dividend. Chubb pays out 14.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Chubb has increased its dividend for 31 consecutive years. Chubb is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

71.0% of Brown & Brown shares are held by institutional investors. Comparatively, 83.8% of Chubb shares are held by institutional investors. 13.1% of Brown & Brown shares are held by company insiders. Comparatively, 0.4% of Chubb shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Brown & Brown	17.63%	13.29%	5.63%
Chubb	18.15%	14.41%	4.13%

Earnings & Valuation

This table compares Brown & Brown and Chubb”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Brown & Brown	$5.90 billion	3.92	$1.05 billion	$3.16	22.07
Chubb	$59.40 billion	2.34	$10.31 billion	$28.58	12.74

Chubb has higher revenue and earnings than Brown & Brown. Chubb is trading at a lower price-to-earnings ratio than Brown & Brown, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Brown & Brown has a beta of 0.6, suggesting that its share price is 40% less volatile than the S&P 500. Comparatively, Chubb has a beta of 0.36, suggesting that its share price is 64% less volatile than the S&P 500.

Summary

Chubb beats Brown & Brown on 12 of the 18 factors compared between the two stocks.

About Brown & Brown

Brown & Brown, Inc. is an insurance agency, wholesale brokerage, insurance program and service organization. It engages in the provision of insurance brokerage services and casualty insurance underwriting services. It operates through the following segments: Retail, National Programs, Wholesale Brokerage, and Services. The Retail Segment receives fees in lieu of commissions. The National Programs segment acts as a managing general agent and provides professional liability and related package products for certain professionals, a range of insurance products for individuals, flood coverage, and targeted products and services designated for specific industries, trade groups, governmental entities and market niches. The Wholesale Brokerage segment markets and sells excess and surplus commercial and personal lines insurance, primarily through independent agents and brokers, as well as the company’s retail agents. The Services segment provides insurance-related services, including third-party claims administration and comprehensive medical utilization management services in both the workers’ compensation and all-lines liability arenas, as well as Medicare Set-aside services, social security disability and Medicare benefits advocacy services and claims adjusting services. The company was founded by J. Adrian Brown and Charles Covington Owen in 1939 and is headquartered in Daytona Beach, FL.

About Chubb

Chubb Limited provides insurance and reinsurance products worldwide. The company's North America Commercial P&C Insurance segment offers commercial property, casualty, workers' compensation, package policies, risk management, financial lines, marine, construction, environmental, medical risk, cyber risk, surety, and casualty; and group accident and health insurance to large, middle market, and small commercial businesses. Its North America Personal P&C Insurance segment provides affluent and high net worth individuals and families with homeowners, automobile and collector cars, valuable articles, personal and excess liability, travel insurance, and recreational marine insurance and services. The company's North America Agricultural Insurance segment offers multiple peril crop and crop-hail insurance; and coverage for farm, ranch, and specialty property and casualty, and commercial agriculture products. Its Overseas General Insurance segment provides coverage for traditional commercial property and casualty; specialty categories, such as financial lines, marine, energy, aviation, political risk, and construction; and group accident and health, and traditional and specialty personal lines for corporations, middle markets, and small customers through retail brokers, agents, and other channels. The company's Global Reinsurance segment offers traditional and specialty reinsurance under the Chubb Tempest Re brand to property and casualty companies. Its Life Insurance segment provides protection and savings products comprising whole life, endowment plans, individual and life, group term life, health protection, personal accident, credit life, universal life, group employee benefits, and unit linked contracts. It markets its products primarily through insurance and reinsurance brokers. The company was formerly known as ACE Limited and changed its name to Chubb Limited in January 2016. Chubb Limited was incorporated in 1985 and is headquartered in Zurich, Switzerland.