RenaissanceRe (NYSE:RNR) vs. Brown & Brown (NYSE:BRO) Head to Head Comparison

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

Risk & Volatility

Brown & Brown has a beta of 0.58, meaning that its stock price is 42% less volatile than the S&P 500. Comparatively, RenaissanceRe has a beta of 0.17, meaning that its stock price is 83% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Brown & Brown	17.75%	13.17%	5.56%
RenaissanceRe	23.65%	23.10%	4.62%

Dividends

Brown & Brown pays an annual dividend of $0.66 per share and has a dividend yield of 1.0%. RenaissanceRe pays an annual dividend of $1.64 per share and has a dividend yield of 0.5%. Brown & Brown pays out 20.8% of its earnings in the form of a dividend. RenaissanceRe pays out 2.8% 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. RenaissanceRe has raised its dividend for 30 consecutive years.

Valuation and Earnings

This table compares Brown & Brown and RenaissanceRe”s 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	3.76	$1.05 billion	$3.17	20.92
RenaissanceRe	$12.85 billion	1.06	$2.68 billion	$58.27	5.61

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

Institutional & Insider Ownership

71.0% of Brown & Brown shares are held by institutional investors. Comparatively, 100.0% of RenaissanceRe shares are held by institutional investors. 13.1% of Brown & Brown shares are held by insiders. Comparatively, 2.3% of RenaissanceRe shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Brown & Brown	1	14	4	0	2.16
RenaissanceRe	1	11	5	0	2.24

Brown & Brown currently has a consensus target price of $76.80, indicating a potential upside of 15.79%. RenaissanceRe has a consensus target price of $336.33, indicating a potential upside of 2.97%. Given Brown & Brown’s higher possible upside, analysts clearly believe Brown & Brown is more favorable than RenaissanceRe.

Summary

RenaissanceRe beats Brown & Brown on 10 of the 17 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 RenaissanceRe

RenaissanceRe Holdings Ltd., together with its subsidiaries, provides reinsurance and insurance products in the United States and internationally. The company operates through Property, and Casualty and Specialty segments. The Property segment writes property catastrophe excess of loss reinsurance and excess of loss reinsurance to insure insurance and reinsurance companies against natural and man-made catastrophes, including hurricanes, earthquakes, typhoons, and tsunamis, as well as winter storms, freezes, floods, fires, windstorms, tornadoes, explosions, and acts of terrorism; and other property class of products, such as proportional reinsurance, property per risk, property reinsurance, binding facilities, and regional U.S. multi-line reinsurance. The Casualty and Specialty segment writes various classes of products, such as directors and officers, medical malpractice, and professional indemnity; automobile and employer’s liability, casualty clash, umbrella or excess casualty, workers’ compensation, and general liability; financial and mortgage guaranty, political risk, surety, and trade credit; and accident and health, agriculture, aviation, cyber, energy, marine, satellite, and terrorism. It distributes products and services primarily through intermediaries. The company invests in and manages funds. RenaissanceRe Holdings Ltd. was founded in 1993 and is headquartered in Pembroke, Bermuda.