ARTHUR J GALLAGHER & CO (AJG) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:AJG - US3635761097 - Common Stock
260.77 USD
+2.07 (+0.8%)
260.77 USD
0 (0%)
Overall AJG gets a fundamental rating of 5 out of 10. We evaluated AJG against 148 industry peers in the Insurance industry. While AJG belongs to the best of the industry regarding profitability, 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.
Each year in the past 5 years AJG had a positive operating cash flow.
1.2 Ratios
With a Return On Assets value of 2.03%, AJG perfoms like the industry average, outperforming 52.70% of the companies in the same industry.
AJG's Return On Equity of 6.90% is on the low side compared to the rest of the industry. AJG is outperformed by 70.27% of its industry peers.
AJG has a Return On Invested Capital of 6.70%. This is amongst the best in the industry. AJG outperforms 86.49% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for AJG is significantly below the industry average of 14.88%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.03% | ||
| ROE | 6.9% | ||
| ROIC | 6.7% |
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
Looking at the Profit Margin, with a value of 12.29%, AJG is in the better half of the industry, outperforming 66.22% of the companies in the same industry.
In the last couple of years the Profit Margin of AJG has grown nicely.
AJG has a better Operating Margin (24.80%) than 83.78% of its industry peers.
In the last couple of years the Operating Margin of AJG has grown nicely.
The Gross Margin of AJG (46.39%) is better than 92.57% of its industry peers.
AJG's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 24.8% | ||
| PM (TTM) | 12.29% | ||
| GM | 46.39% |
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.
The debt/assets ratio for AJG is higher compared to a year ago.
2.2 Solvency
AJG has an Altman-Z score of 1.16. This is a bad value and indicates that AJG is not financially healthy and even has some risk of bankruptcy.
AJG has a better Altman-Z score (1.16) than 80.41% of its industry peers.
AJG has a debt to FCF ratio of 7.42. This is a slightly negative value and a sign of low solvency as AJG would need 7.42 years to pay back of all of its debts.
AJG has a worse Debt to FCF ratio (7.42) than 68.24% of its industry peers.
A Debt/Equity ratio of 0.53 indicates that AJG is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.53, AJG is not doing good in the industry: 75.00% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.53 | ||
| Debt/FCF | 7.42 | ||
| Altman-Z | 1.16 |
ROIC/WACC0.84
WACC7.95%
2.3 Liquidity
AJG has a Current Ratio of 1.06. This is a normal value and indicates that AJG is financially healthy and should not expect problems in meeting its short term obligations.
With a decent Current ratio value of 1.06, AJG is doing good in the industry, outperforming 79.05% of the companies in the same industry.
AJG has a Quick Ratio of 1.06. This is a normal value and indicates that AJG is financially healthy and should not expect problems in meeting its short term obligations.
AJG's Quick ratio of 1.06 is fine compared to the rest of the industry. AJG outperforms 79.05% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.06 | ||
| Quick Ratio | 1.06 |
3. Growth
3.1 Past
AJG shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 5.98%.
AJG shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 22.61% yearly.
The Revenue has grown by 15.61% in the past year. This is quite good.
The Revenue has been growing by 9.94% on average over the past years. This is quite good.
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 Y7.64%
EPS Next 2Y15.51%
EPS Next 3Y14.84%
EPS Next 5Y16.3%
Revenue Next Year21.51%
Revenue Next 2Y23.01%
Revenue Next 3Y18.16%
Revenue Next 5Y13.92%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in 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
A Price/Earnings ratio of 24.95 indicates a rather expensive valuation of AJG.
Based on the Price/Earnings ratio, AJG is valued a bit more expensive than 74.32% of the companies in the same industry.
AJG's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 26.59.
AJG is valuated rather expensively with a Price/Forward Earnings ratio of 19.27.
Based on the Price/Forward Earnings ratio, AJG is valued a bit more expensive than 70.27% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of AJG to the average of the S&P500 Index (24.03), we can say AJG is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.95 | ||
| Fwd PE | 19.27 |
4.2 Price Multiples
AJG's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. AJG is more expensive than 66.89% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of AJG indicates a slightly more expensive valuation: AJG is more expensive than 72.30% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 37.89 | ||
| EV/EBITDA | 18.65 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates AJG does not grow enough to justify the current Price/Earnings ratio.
The decent profitability rating of AJG may justify a higher PE ratio.
AJG's earnings are expected to grow with 14.84% in the coming years. This may justify a more expensive valuation.
PEG (NY)3.26
PEG (5Y)1.1
EPS Next 2Y15.51%
EPS Next 3Y14.84%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.03%, AJG has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 2.30, AJG has a dividend in line with its industry peers.
With a Dividend Yield of 1.03, AJG pays less dividend than the S&P500 average, which is at 1.88.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.03% |
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
AJG pays out 39.43% of its income as dividend. This is a sustainable payout ratio.
AJG's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP39.43%
EPS Next 2Y15.51%
EPS Next 3Y14.84%
260.77
+2.07 (+0.8%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners91.8%
Inst Owner Change0.93%
Ins Owners0.6%
Ins Owner Change0.39%
Market Cap66.97B
Revenue(TTM)13.03B
Net Income(TTM)1.60B
Analysts76
Price Target316.59 (21.41%)
Short Float %1.68%
Short Ratio2.49
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.03% |
Yearly Dividend2.25
Dividend Growth(5Y)5.46%
DP39.43%
Div Incr Years14
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-6.16%
Min EPS beat(2)-9.74%
Max EPS beat(2)-2.57%
EPS beat(4)2
Avg EPS beat(4)-1.8%
Min EPS beat(4)-9.74%
Max EPS beat(4)3.69%
EPS beat(8)3
Avg EPS beat(8)-1.04%
EPS beat(12)6
Avg EPS beat(12)-1.62%
EPS beat(16)10
Avg EPS beat(16)-0.76%
Revenue beat(2)0
Avg Revenue beat(2)-2.63%
Min Revenue beat(2)-4.45%
Max Revenue beat(2)-0.81%
Revenue beat(4)0
Avg Revenue beat(4)-2.01%
Min Revenue beat(4)-4.45%
Max Revenue beat(4)-0.81%
Revenue beat(8)0
Avg Revenue beat(8)-1.86%
Revenue beat(12)2
Avg Revenue beat(12)-0.85%
Revenue beat(16)5
Avg Revenue beat(16)-0.06%
PT rev (1m)-8.99%
PT rev (3m)-8.67%
EPS NQ rev (1m)-0.37%
EPS NQ rev (3m)-4.9%
EPS NY rev (1m)-1.24%
EPS NY rev (3m)-2.16%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.47%
Revenue NY rev (1m)-0.5%
Revenue NY rev (3m)0.06%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.95 | ||
| Fwd PE | 19.27 | ||
| P/S | 5.14 | ||
| P/FCF | 37.89 | ||
| P/OCF | 34.95 | ||
| P/B | 2.89 | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.65 |
EPS(TTM)10.45
EY4.01%
EPS(NY)13.53
Fwd EY5.19%
FCF(TTM)6.88
FCFY2.64%
OCF(TTM)7.46
OCFY2.86%
SpS50.74
BVpS90.36
TBVpS-38.01
PEG (NY)3.26
PEG (5Y)1.1
Graham Number145.76
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.03% | ||
| ROE | 6.9% | ||
| ROCE | 8.44% | ||
| ROIC | 6.7% | ||
| ROICexc | 6.96% | ||
| ROICexgc | 61.85% | ||
| OM | 24.8% | ||
| PM (TTM) | 12.29% | ||
| GM | 46.39% | ||
| FCFM | 13.56% |
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-Score4
Asset Turnover0.16
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.53 | ||
| Debt/FCF | 7.42 | ||
| Debt/EBITDA | 2.93 | ||
| Cap/Depr | 15.31% | ||
| Cap/Sales | 1.14% | ||
| Interest Coverage | 5.99 | ||
| Cash Conversion | 45.57% | ||
| Profit Quality | 110.37% | ||
| Current Ratio | 1.06 | ||
| Quick Ratio | 1.06 | ||
| Altman-Z | 1.16 |
F-Score4
WACC7.95%
ROIC/WACC0.84
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 Y7.64%
EPS Next 2Y15.51%
EPS Next 3Y14.84%
EPS Next 5Y16.3%
Revenue 1Y (TTM)15.61%
Revenue growth 3Y12.07%
Revenue growth 5Y9.94%
Sales Q2Q%21.48%
Revenue Next Year21.51%
Revenue Next 2Y23.01%
Revenue Next 3Y18.16%
Revenue Next 5Y13.92%
EBIT growth 1Y46.9%
EBIT growth 3Y27.14%
EBIT growth 5Y27.83%
EBIT Next Year66.85%
EBIT Next 3Y32.34%
EBIT Next 5Y20.35%
FCF growth 1Y31.06%
FCF growth 3Y15.71%
FCF growth 5Y20.01%
OCF growth 1Y24.56%
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 1 / 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 7.64% in the next year.