ARTHUR J GALLAGHER & CO (AJG)
US3635761097 - Common Stock
Taking everything into account, AJG scores 5 out of 10 in our fundamental rating. AJG was compared to 140 industry peers in the Insurance industry. While AJG has a great profitability rating, there are some minor concerns on its financial health. AJG is valied quite expensively at the moment, while it does show a decent growth rate.
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
The Return On Assets of AJG (2.05%) is comparable to the rest of the industry.
AJG has a Return On Equity of 9.62%. This is comparable to the rest of the industry: AJG outperforms 45.32% of its industry peers.
The Return On Invested Capital of AJG (8.17%) is better than 92.09% of its industry peers.
The Average Return On Invested Capital over the past 3 years for AJG is above the industry average of 4.27%.
The 3 year average ROIC (7.65%) for AJG is below the current ROIC(8.17%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.05% | ||
| ROE | 9.62% | ||
| ROIC | 8.17% |
ROA(3y)2.5%
ROA(5y)2.92%
ROE(3y)10.61%
ROE(5y)11.61%
ROIC(3y)7.65%
ROIC(5y)7.37%
1.3 Margins
With a decent Profit Margin value of 10.40%, AJG is doing good in the industry, outperforming 65.47% of the companies in the same industry.
In the last couple of years the Profit Margin of AJG has remained more or less at the same level.
With a decent Operating Margin value of 19.52%, AJG is doing good in the industry, outperforming 78.42% of the companies in the same industry.
In the last couple of years the Operating Margin of AJG has grown nicely.
AJG has a better Gross Margin (45.10%) than 94.24% of its industry peers.
In the last couple of years the Gross Margin of AJG has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.52% | ||
| PM (TTM) | 10.4% | ||
| GM | 45.1% |
OM growth 3Y2.39%
OM growth 5Y14.92%
PM growth 3Y-6.27%
PM growth 5Y1.05%
GM growth 3Y6.87%
GM growth 5Y9.78%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so AJG is destroying value.
The number of shares outstanding for AJG has been increased compared to 1 year ago.
The number of shares outstanding for AJG has been increased compared to 5 years ago.
AJG has a better debt/assets ratio than last year.
2.2 Solvency
AJG has an Altman-Z score of 1.35. This is a bad value and indicates that AJG is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of AJG (1.35) is better than 85.61% of its industry peers.
AJG has a debt to FCF ratio of 3.45. This is a good value and a sign of high solvency as AJG would need 3.45 years to pay back of all of its debts.
With a Debt to FCF ratio value of 3.45, AJG perfoms like the industry average, outperforming 40.29% of the companies in the same industry.
AJG has a Debt/Equity ratio of 0.66. This is a neutral value indicating AJG is somewhat dependend on debt financing.
AJG has a worse Debt to Equity ratio (0.66) than 74.10% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.66 | ||
| Debt/FCF | 3.45 | ||
| Altman-Z | 1.35 |
ROIC/WACC0.97
WACC8.46%
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.
The Current ratio of AJG (1.06) is better than 79.14% of its industry peers.
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.
The Quick ratio of AJG (1.06) is better than 79.14% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.06 | ||
| Quick Ratio | 1.06 |
3. Growth
3.1 Past
AJG shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 19.81%, which is quite good.
AJG shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 20.54% yearly.
The Revenue has grown by 16.57% in the past year. This is quite good.
The Revenue has been growing slightly by 7.75% on average over the past years.
EPS 1Y (TTM)19.81%
EPS 3Y22.9%
EPS 5Y20.54%
EPS Q2Q%13%
Revenue 1Y (TTM)16.57%
Revenue growth 3Y12.87%
Revenue growth 5Y7.75%
Sales Q2Q%11.86%
3.2 Future
The Earnings Per Share is expected to grow by 12.87% on average over the next years. This is quite good.
AJG is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 11.35% yearly.
EPS Next Y16.23%
EPS Next 2Y13.89%
EPS Next 3Y13.06%
EPS Next 5Y12.87%
Revenue Next Year14.63%
Revenue Next 2Y12.36%
Revenue Next 3Y11.35%
Revenue Next 5YN/A
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 30.01 indicates a quite expensive valuation of AJG.
Based on the Price/Earnings ratio, AJG is valued a bit more expensive than 73.38% of the companies in the same industry.
AJG is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 28.65, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 25.98 indicates a quite expensive valuation of AJG.
71.94% of the companies in the same industry are cheaper than AJG, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 23.56. AJG is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.01 | ||
| Fwd PE | 25.98 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, AJG is valued a bit more expensive than the industry average as 61.15% of the companies are valued more cheaply.
Based on the Price/Free Cash Flow ratio, AJG is valued a bit more expensive than the industry average as 70.50% of the companies are valued more cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.13 | ||
| EV/EBITDA | 23.48 |
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.
AJG has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as AJG's earnings are expected to grow with 13.06% in the coming years.
PEG (NY)1.85
PEG (5Y)1.46
EPS Next 2Y13.89%
EPS Next 3Y13.06%
5. Dividend
5.1 Amount
With a yearly dividend of 0.81%, AJG is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 4.25, AJG is paying slightly less dividend.
Compared to an average S&P500 Dividend Yield of 2.23, AJG's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.81% |
5.2 History
The dividend of AJG has a limited annual growth rate of 5.97%.
AJG has paid a dividend for at least 10 years, which is a reliable track record.
AJG has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)5.97%
Div Incr Years13
Div Non Decr Years33
5.3 Sustainability
AJG pays out 43.74% of its income as dividend. This is a bit on the high side, but may be sustainable.
AJG's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP43.74%
EPS Next 2Y13.89%
EPS Next 3Y13.06%
ARTHUR J GALLAGHER & CO
NYSE:AJG (11/20/2024, 8:06:07 PM)
Premarket: 295.71 -0.17 (-0.06%)295.88
+3.39 (+1.16%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap64.92B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.81% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
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EPS beat(4)
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EPS beat(8)
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EPS beat(12)
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EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
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Revenue beat(4)
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Revenue beat(8)
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Revenue beat(12)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.01 | ||
| Fwd PE | 25.98 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)1.85
PEG (5Y)1.46
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.05% | ||
| ROE | 9.62% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 19.52% | ||
| PM (TTM) | 10.4% | ||
| GM | 45.1% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.2
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.66 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.06 | ||
| Quick Ratio | 1.06 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)19.81%
EPS 3Y22.9%
EPS 5Y
EPS Q2Q%
EPS Next Y16.23%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)16.57%
Revenue growth 3Y12.87%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y