Brown & Brown (NYSE:BRO) versus Accelerant (NYSE:ARX) Critical Comparison

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

Risk & Volatility

Accelerant has a beta of 0.08, suggesting that its stock price is 92% less volatile than the S&P 500. Comparatively, Brown & Brown has a beta of 0.6, suggesting that its stock price is 40% less volatile than the S&P 500.

Institutional and Insider Ownership

71.0% of Brown & Brown shares are owned by institutional investors. 66.6% of Accelerant shares are owned by company insiders. Comparatively, 13.1% of Brown & Brown shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Accelerant and Brown & Brown, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Accelerant	2	7	3	0	2.08
Brown & Brown	1	12	8	0	2.33

Accelerant presently has a consensus price target of $17.98, indicating a potential downside of 9.19%. Brown & Brown has a consensus price target of $76.00, indicating a potential upside of 18.48%. Given Brown & Brown’s stronger consensus rating and higher possible upside, analysts plainly believe Brown & Brown is more favorable than Accelerant.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Accelerant	-113.08%	42.79%	3.68%
Brown & Brown	17.75%	13.17%	5.56%

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Accelerant	$912.90 million	4.71	-$1.35 billion	($6.65)	-2.98
Brown & Brown	$5.90 billion	3.64	$1.05 billion	$3.17	20.24

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

Summary

Brown & Brown beats Accelerant on 10 of the 14 factors compared between the two stocks.

About Accelerant

Accelerant Holdings, together with its subsidiaries, operates a data-driven risk exchange that connects selected specialty insurance underwriters with risk capital partners. It operates through Exchange Services, MGA Operations, and Underwriting segments. The Exchange Services segment consists of risk exchange, its operating platform that incorporates various technology, data ingestion, and agency operations that serve the needs of its members and risk capital partners. Its Risk capital partners write premiums directly through the Risk Exchange pay us a fixed-percentage, volume-based fee for sourcing, managing, and monitoring the business they write. The MGA Operations segment includes the fees earned by members, predominantly for originating and underwriting a portfolio of insurance policies, reduced by the expenses associated with providing services. The Underwriting segment is involved in underwriting insurance policies and assumption of reinsurance policies issued or accepted by consolidated insurance and reinsurance companies. The activities of insurance companies include property and casualty insurance, policy issuance, and reinsurance arrangements. It serves small-to-medium sized commercial clients primarily in the United States, Europe, Canada, Australia, and the United Kingdom. Accelerant Holdings was founded in 2018 and is based in Grand Cayman, Cayman Islands.

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.