ARTHUR J GALLAGHER & CO (AJG) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:AJG - US3635761097 - Common Stock
264.59 USD
+0.05 (+0.02%)
264.59 USD
0 (0%)
Overall AJG gets a fundamental rating of 5 out of 10. We evaluated AJG against 146 industry peers in the Insurance industry. AJG scores excellent on profitability, but there are concerns on its financial health. AJG shows excellent growth, but is valued quite expensive already.
1. Profitability
1.1 Basic Checks
AJG had positive earnings in the past year.
In the past year AJG had a positive cash flow from operations.
AJG had positive earnings in each of the past 5 years.
In the past 5 years AJG always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 2.03%, AJG is in line with its industry, outperforming 52.74% 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 70.55% of its industry peers.
The Return On Invested Capital of AJG (6.70%) is better than 86.99% of its industry peers.
AJG had an Average Return On Invested Capital over the past 3 years of 7.35%. This is significantly below the industry average of 15.11%.
| 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 66.44% of the companies in the same industry.
In the last couple of years the Profit Margin of AJG has grown nicely.
AJG's Operating Margin of 24.80% is amongst the best of the industry. AJG outperforms 84.93% of its industry peers.
In the last couple of years the Operating Margin of AJG has grown nicely.
AJG has a better Gross Margin (46.39%) than 94.52% 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
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.
AJG has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, AJG has a worse debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 1.17, we must say that AJG is in the distress zone and has some risk of bankruptcy.
AJG's Altman-Z score of 1.17 is amongst the best of the industry. AJG outperforms 81.51% 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.
The Debt to FCF ratio of AJG (7.42) is worse than 68.49% 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: 75.34% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.53 | ||
| Debt/FCF | 7.42 | ||
| Altman-Z | 1.17 |
ROIC/WACC0.84
WACC7.99%
2.3 Liquidity
A Current Ratio of 1.06 indicates that AJG should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.06, AJG is in the better half of the industry, outperforming 79.45% of the companies in the same industry.
A Quick Ratio of 1.06 indicates that AJG should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.06, AJG is in the better half of the industry, outperforming 79.45% of the companies in the same industry.
| 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%.
The Earnings Per Share has been growing by 22.61% on average over the past years. This is a very strong growth
The Revenue has grown by 15.61% in the past year. This is quite good.
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
The Earnings Per Share is expected to grow by 16.30% 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 13.92% yearly.
EPS Next Y7.15%
EPS Next 2Y15.43%
EPS Next 3Y14.68%
EPS Next 5Y16.3%
Revenue Next Year21.41%
Revenue Next 2Y22.12%
Revenue Next 3Y17.89%
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
A Price/Earnings ratio of 25.32 indicates a quite expensive valuation of AJG.
Based on the Price/Earnings ratio, AJG is valued a bit more expensive than the industry average as 73.97% of the companies are valued more cheaply.
Compared to an average S&P500 Price/Earnings ratio of 27.19, AJG is valued at the same level.
Based on the Price/Forward Earnings ratio of 19.59, the valuation of AJG can be described as rather expensive.
70.55% 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 23.92. AJG is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.32 | ||
| Fwd PE | 19.59 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of AJG indicates a slightly more expensive valuation: AJG is more expensive than 67.12% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, AJG is valued a bit more expensive than 72.60% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 38.45 | ||
| EV/EBITDA | 18.89 |
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 a very decent profitability rating, which may justify a higher PE ratio.
AJG's earnings are expected to grow with 14.68% in the coming years. This may justify a more expensive valuation.
PEG (NY)3.54
PEG (5Y)1.12
EPS Next 2Y15.43%
EPS Next 3Y14.68%
5. Dividend
5.1 Amount
AJG has a yearly dividend return of 0.98%, which is pretty low.
Compared to an average industry Dividend Yield of 2.42, AJG has a dividend in line with its industry peers.
With a Dividend Yield of 0.98, AJG pays less dividend than the S&P500 average, which is at 1.92.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.98% |
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 its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)5.46%
Div Incr Years14
Div Non Decr Years34
5.3 Sustainability
39.43% of the earnings are spent on dividend by AJG. This is a low number and sustainable payout ratio.
AJG's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP39.43%
EPS Next 2Y15.43%
EPS Next 3Y14.68%
264.59
+0.05 (+0.02%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners91.72%
Inst Owner Change-0.11%
Ins Owners0.59%
Ins Owner Change0.31%
Market Cap67.95B
Revenue(TTM)13.03B
Net Income(TTM)1.60B
Analysts75.56
Price Target307.26 (16.13%)
Short Float %1.53%
Short Ratio2.21
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.98% |
Yearly Dividend2.25
Dividend Growth(5Y)5.46%
DP39.43%
Div Incr Years14
Div Non Decr Years34
Ex-DateN/A
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)-2.95%
PT rev (3m)-11.8%
EPS NQ rev (1m)-2.05%
EPS NQ rev (3m)-6.51%
EPS NY rev (1m)-0.46%
EPS NY rev (3m)-3.42%
Revenue NQ rev (1m)-0.19%
Revenue NQ rev (3m)-2.18%
Revenue NY rev (1m)-0.08%
Revenue NY rev (3m)-0.95%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.32 | ||
| Fwd PE | 19.59 | ||
| P/S | 5.21 | ||
| P/FCF | 38.45 | ||
| P/OCF | 35.46 | ||
| P/B | 2.93 | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.89 |
EPS(TTM)10.45
EY3.95%
EPS(NY)13.51
Fwd EY5.11%
FCF(TTM)6.88
FCFY2.6%
OCF(TTM)7.46
OCFY2.82%
SpS50.74
BVpS90.36
TBVpS-38.01
PEG (NY)3.54
PEG (5Y)1.12
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 | 1.17 |
F-Score4
WACC7.99%
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 Y7.15%
EPS Next 2Y15.43%
EPS Next 3Y14.68%
EPS Next 5Y16.3%
Revenue 1Y (TTM)15.61%
Revenue growth 3Y12.07%
Revenue growth 5Y9.94%
Sales Q2Q%21.48%
Revenue Next Year21.41%
Revenue Next 2Y22.12%
Revenue Next 3Y17.89%
Revenue Next 5Y13.92%
EBIT growth 1Y46.9%
EBIT growth 3Y27.14%
EBIT growth 5Y27.83%
EBIT Next Year65.44%
EBIT Next 3Y31.73%
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 of ARTHUR J GALLAGHER & CO (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.
Can you provide the dividend sustainability for AJG stock?
The dividend rating of ARTHUR J GALLAGHER & CO (AJG) is 5 / 10 and the dividend payout ratio is 39.43%.