ARTHUR J GALLAGHER & CO (AJG) Stock Fundamental Analysis
USA - NYSE:AJG - US3635761097 - Common Stock
258.64 USD
-0.67 (-0.26%)
258 USD
-0.64 (-0.25%)
Taking everything into account, AJG scores 5 out of 10 in our fundamental rating. AJG was compared to 147 industry peers in the Insurance industry. AJG has an excellent profitability rating, but there are concerns on its financial health. AJG shows excellent growth, but is valued quite expensive already.
1. Profitability
1.1 Basic Checks
In the past year AJG was profitable.
AJG had a positive operating cash flow in the past year.
AJG had positive earnings in each of the past 5 years.
AJG had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 2.05%, AJG is in line with its industry, outperforming 52.38% of the companies in the same industry.
With a Return On Equity value of 7.13%, AJG is not doing good in the industry: 70.07% of the companies in the same industry are doing better.
AJG has a better Return On Invested Capital (6.72%) than 88.44% of its industry peers.
The Average Return On Invested Capital over the past 3 years for AJG is above the industry average of 4.44%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.05% | ||
| ROE | 7.13% | ||
| ROIC | 6.72% |
ROA(3y)2.35%
ROA(5y)2.69%
ROE(3y)9.48%
ROE(5y)10.47%
ROIC(3y)7.35%
ROIC(5y)7.18%
1.3 Margins
AJG has a Profit Margin of 13.16%. This is in the better half of the industry: AJG outperforms 74.83% of its industry peers.
AJG's Profit Margin has improved in the last couple of years.
AJG's Operating Margin of 25.44% is amongst the best of the industry. AJG outperforms 89.12% of its industry peers.
AJG's Operating Margin has improved in the last couple of years.
The Gross Margin of AJG (46.51%) is better than 93.88% of its industry peers.
AJG's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 25.44% | ||
| PM (TTM) | 13.16% | ||
| GM | 46.51% |
OM growth 3Y13.45%
OM growth 5Y16.28%
PM growth 3Y4.65%
PM growth 5Y6.37%
GM growth 3Y6.97%
GM growth 5Y6.66%
2. Health
2.1 Basic Checks
AJG has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
AJG has more shares outstanding than it did 1 year ago.
AJG has more shares outstanding than it did 5 years ago.
AJG has a worse debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.31, we must say that AJG is in the distress zone and has some risk of bankruptcy.
AJG has a better Altman-Z score (1.31) than 80.95% of its industry peers.
The Debt to FCF ratio of AJG is 6.54, which is on the high side as it means it would take AJG, 6.54 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 6.54, AJG is doing worse than 65.99% of the companies in the same industry.
AJG has a Debt/Equity ratio of 0.53. This is a neutral value indicating AJG is somewhat dependend on debt financing.
The Debt to Equity ratio of AJG (0.53) is worse than 70.75% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.53 | ||
| Debt/FCF | 6.54 | ||
| Altman-Z | 1.31 |
ROIC/WACC0.85
WACC7.93%
2.3 Liquidity
AJG has a Current Ratio of 1.36. This is a normal value and indicates that AJG is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.36, AJG belongs to the top of the industry, outperforming 85.03% of the companies in the same industry.
AJG has a Quick Ratio of 1.36. This is a normal value and indicates that AJG is financially healthy and should not expect problems in meeting its short term obligations.
With an excellent Quick ratio value of 1.36, AJG belongs to the best of the industry, outperforming 85.03% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.36 | ||
| Quick Ratio | 1.36 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 5.98% over the past year.
Measured over the past years, AJG shows a very strong growth in Earnings Per Share. The EPS has been growing by 22.61% on average per year.
AJG shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 15.61%.
AJG shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 9.94% yearly.
EPS 1Y (TTM)5.98%
EPS 3Y22.62%
EPS 5Y22.61%
EPS Q2Q%2.65%
Revenue 1Y (TTM)15.61%
Revenue growth 3Y12.07%
Revenue growth 5Y9.94%
Sales Q2Q%21.48%
3.2 Future
AJG is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 16.30% yearly.
The Revenue is expected to grow by 13.92% on average over the next years. This is quite good.
EPS Next Y8.99%
EPS Next 2Y16.08%
EPS Next 3Y14.75%
EPS Next 5Y16.3%
Revenue Next Year22.11%
Revenue Next 2Y22.43%
Revenue Next 3Y17.77%
Revenue Next 5Y13.92%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
AJG is valuated rather expensively with a Price/Earnings ratio of 24.75.
Based on the Price/Earnings ratio, AJG is valued a bit more expensive than 77.55% of the companies in the same industry.
When comparing the Price/Earnings ratio of AJG to the average of the S&P500 Index (25.51), we can say AJG is valued inline with the index average.
With a Price/Forward Earnings ratio of 18.93, AJG is valued on the expensive side.
Based on the Price/Forward Earnings ratio, AJG is valued a bit more expensive than 71.43% of the companies in the same industry.
AJG is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 34.98, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.75 | ||
| Fwd PE | 18.93 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, AJG is valued a bit more expensive than 63.27% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, AJG is valued a bit more expensive than the industry average as 69.39% of the companies are valued more cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 33.63 | ||
| EV/EBITDA | 15.91 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of AJG may justify a higher PE ratio.
A more expensive valuation may be justified as AJG's earnings are expected to grow with 14.75% in the coming years.
PEG (NY)2.75
PEG (5Y)1.09
EPS Next 2Y16.08%
EPS Next 3Y14.75%
5. Dividend
5.1 Amount
AJG has a Yearly Dividend Yield of 1.01%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.52, AJG has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.44, AJG's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.01% |
5.2 History
The dividend of AJG has a limited annual growth rate of 5.46%.
AJG has paid a dividend for at least 10 years, which is a reliable track record.
AJG has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)5.46%
Div Incr Years14
Div Non Decr Years34
5.3 Sustainability
36.32% of the earnings are spent on dividend by AJG. This is a low number and sustainable payout ratio.
The dividend of AJG is growing, but earnings are growing more, so the dividend growth is sustainable.
DP36.32%
EPS Next 2Y16.08%
EPS Next 3Y14.75%
258.64
-0.67 (-0.26%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners90.89%
Inst Owner Change0.89%
Ins Owners0.6%
Ins Owner Change1.57%
Market Cap66.30B
Revenue(TTM)13.03B
Net Income(TTM)1.64B
Analysts75.83
Price Target347.85 (34.49%)
Short Float %1.49%
Short Ratio2.33
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.01% |
Yearly Dividend2.25
Dividend Growth(5Y)5.46%
DP36.32%
Div Incr Years14
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.57%
Min EPS beat(2)-2.57%
Max EPS beat(2)1.43%
EPS beat(4)2
Avg EPS beat(4)0.27%
Min EPS beat(4)-2.57%
Max EPS beat(4)3.69%
EPS beat(8)4
Avg EPS beat(8)0.38%
EPS beat(12)7
Avg EPS beat(12)-0.62%
EPS beat(16)11
Avg EPS beat(16)0.38%
Revenue beat(2)0
Avg Revenue beat(2)-0.86%
Min Revenue beat(2)-0.9%
Max Revenue beat(2)-0.81%
Revenue beat(4)0
Avg Revenue beat(4)-1.44%
Min Revenue beat(4)-2.19%
Max Revenue beat(4)-0.81%
Revenue beat(8)0
Avg Revenue beat(8)-1.32%
Revenue beat(12)2
Avg Revenue beat(12)-0.52%
Revenue beat(16)6
Avg Revenue beat(16)1.13%
PT rev (1m)-0.15%
PT rev (3m)0.84%
EPS NQ rev (1m)1.01%
EPS NQ rev (3m)4.76%
EPS NY rev (1m)-1.76%
EPS NY rev (3m)-0.87%
Revenue NQ rev (1m)2.05%
Revenue NQ rev (3m)5.86%
Revenue NY rev (1m)-0.38%
Revenue NY rev (3m)0.44%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.75 | ||
| Fwd PE | 18.93 | ||
| P/S | 5.32 | ||
| P/FCF | 33.63 | ||
| P/OCF | 31.28 | ||
| P/B | 2.88 | ||
| P/tB | 15.97 | ||
| EV/EBITDA | 15.91 |
EPS(TTM)10.45
EY4.04%
EPS(NY)13.66
Fwd EY5.28%
FCF(TTM)7.69
FCFY2.97%
OCF(TTM)8.27
OCFY3.2%
SpS48.65
BVpS89.81
TBVpS16.19
PEG (NY)2.75
PEG (5Y)1.09
Graham Number145.31
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.05% | ||
| ROE | 7.13% | ||
| ROCE | 8.44% | ||
| ROIC | 6.72% | ||
| ROICexc | 10.82% | ||
| ROICexgc | 55.53% | ||
| OM | 25.44% | ||
| PM (TTM) | 13.16% | ||
| GM | 46.51% | ||
| FCFM | 15.81% |
ROA(3y)2.35%
ROA(5y)2.69%
ROE(3y)9.48%
ROE(5y)10.47%
ROIC(3y)7.35%
ROIC(5y)7.18%
ROICexc(3y)9.13%
ROICexc(5y)8.37%
ROICexgc(3y)48.09%
ROICexgc(5y)40.27%
ROCE(3y)9.3%
ROCE(5y)9.1%
ROICexgc growth 3Y31.7%
ROICexgc growth 5Y18.43%
ROICexc growth 3Y18.63%
ROICexc growth 5Y11.64%
OM growth 3Y13.45%
OM growth 5Y16.28%
PM growth 3Y4.65%
PM growth 5Y6.37%
GM growth 3Y6.97%
GM growth 5Y6.66%
F-Score6
Asset Turnover0.16
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.53 | ||
| Debt/FCF | 6.54 | ||
| Debt/EBITDA | 3 | ||
| Cap/Depr | 16.31% | ||
| Cap/Sales | 1.19% | ||
| Interest Coverage | 7.87 | ||
| Cash Conversion | 51.96% | ||
| Profit Quality | 120.15% | ||
| Current Ratio | 1.36 | ||
| Quick Ratio | 1.36 | ||
| Altman-Z | 1.31 |
F-Score6
WACC7.93%
ROIC/WACC0.85
Cap/Depr(3y)25.04%
Cap/Depr(5y)23.1%
Cap/Sales(3y)1.76%
Cap/Sales(5y)1.65%
Profit Quality(3y)176.95%
Profit Quality(5y)182.63%
High Growth Momentum
Growth
EPS 1Y (TTM)5.98%
EPS 3Y22.62%
EPS 5Y22.61%
EPS Q2Q%2.65%
EPS Next Y8.99%
EPS Next 2Y16.08%
EPS Next 3Y14.75%
EPS Next 5Y16.3%
Revenue 1Y (TTM)15.61%
Revenue growth 3Y12.07%
Revenue growth 5Y9.94%
Sales Q2Q%21.48%
Revenue Next Year22.11%
Revenue Next 2Y22.43%
Revenue Next 3Y17.77%
Revenue Next 5Y13.92%
EBIT growth 1Y51.53%
EBIT growth 3Y27.14%
EBIT growth 5Y27.83%
EBIT Next Year67.25%
EBIT Next 3Y31.74%
EBIT Next 5Y20.35%
FCF growth 1Y21.9%
FCF growth 3Y15.71%
FCF growth 5Y20.01%
OCF growth 1Y17.9%
OCF growth 3Y14.87%
OCF growth 5Y18.21%
ARTHUR J GALLAGHER & CO / AJG FAQ
Can you provide the ChartMill fundamental rating for ARTHUR J GALLAGHER & CO?
ChartMill assigns a fundamental rating of 5 / 10 to AJG.
What is the valuation status for AJG stock?
ChartMill assigns a valuation rating of 2 / 10 to ARTHUR J GALLAGHER & CO (AJG). This can be considered as Overvalued.
How profitable is ARTHUR J GALLAGHER & CO (AJG) stock?
ARTHUR J GALLAGHER & CO (AJG) has a profitability rating of 7 / 10.
How financially healthy is ARTHUR J GALLAGHER & CO?
The financial health rating of ARTHUR J GALLAGHER & CO (AJG) is 3 / 10.
What is the earnings growth outlook for ARTHUR J GALLAGHER & CO?
The Earnings per Share (EPS) of ARTHUR J GALLAGHER & CO (AJG) is expected to grow by 8.99% in the next year.