ARTHUR J GALLAGHER & CO (AJG) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:AJG - US3635761097 - Common Stock
258.52 USD
+2.37 (+0.93%)
258.52 USD
0 (0%)
We assign a fundamental rating of 5 out of 10 to AJG. AJG was compared to 149 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
- AJG had positive earnings in the past year.
- AJG had a positive operating cash flow in the past year.
- In the past 5 years AJG has always been profitable.
- Each year in the past 5 years AJG had a positive operating cash flow.
1.2 Ratios
- AJG has a Return On Assets (2.03%) which is comparable to the rest of the industry.
- AJG has a worse Return On Equity (6.90%) than 69.80% of its industry peers.
- The Return On Invested Capital of AJG (6.70%) is better than 86.58% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for AJG is significantly below the industry average of 14.92%.
| 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
- AJG has a Profit Margin of 12.29%. This is in the better half of the industry: AJG outperforms 66.44% of its industry peers.
- AJG's Profit Margin has improved in the last couple of years.
- With an excellent Operating Margin value of 24.80%, AJG belongs to the best of the industry, outperforming 83.22% of the companies in the same industry.
- In the last couple of years the Operating Margin of AJG has grown nicely.
- The Gross Margin of AJG (46.39%) is better than 93.29% 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.
- Compared to 1 year ago, AJG has more shares outstanding
- 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 1.15, we must say that AJG is in the distress zone and has some risk of bankruptcy.
- AJG has a better Altman-Z score (1.15) than 79.87% of its industry peers.
- The Debt to FCF ratio of AJG is 7.42, which is on the high side as it means it would take AJG, 7.42 years of fcf income to pay off all of its debts.
- AJG's Debt to FCF ratio of 7.42 is on the low side compared to the rest of the industry. AJG is outperformed by 67.79% of its industry peers.
- AJG has a Debt/Equity ratio of 0.53. This is a neutral value indicating AJG is somewhat dependend on debt financing.
- AJG has a Debt to Equity ratio of 0.53. This is in the lower half of the industry: AJG underperforms 73.83% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.53 | ||
| Debt/FCF | 7.42 | ||
| Altman-Z | 1.15 |
ROIC/WACC0.84
WACC8.02%
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.
- Looking at the Current ratio, with a value of 1.06, AJG is in the better half of the industry, outperforming 79.19% 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 has a Quick ratio of 1.06. This is in the better half of the industry: AJG outperforms 79.19% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.06 | ||
| Quick Ratio | 1.06 |
3. Growth
3.1 Past
- The Earnings Per Share has been growing slightly by 5.98% over the past year.
- 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.
- 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
- Based on estimates for the next years, AJG will show a quite strong growth in Earnings Per Share. The EPS will grow by 16.30% on average per year.
- Based on estimates for the next years, AJG will show a quite strong growth in Revenue. The Revenue will grow by 13.90% on average per year.
EPS Next Y7.15%
EPS Next 2Y15.43%
EPS Next 3Y14.68%
EPS Next 5Y16.3%
Revenue Next Year21.22%
Revenue Next 2Y21.91%
Revenue Next 3Y17.75%
Revenue Next 5Y13.9%
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
- With a Price/Earnings ratio of 24.74, AJG is valued on the expensive side.
- Based on the Price/Earnings ratio, AJG is valued a bit more expensive than 73.83% of the companies in the same industry.
- AJG's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.38.
- AJG is valuated rather expensively with a Price/Forward Earnings ratio of 19.14.
- Based on the Price/Forward Earnings ratio, AJG is valued a bit more expensive than the industry average as 70.47% of the companies are valued more cheaply.
- AJG's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 24.29.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.74 | ||
| Fwd PE | 19.14 |
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 67.11% of the companies in the same industry.
- 71.81% of the companies in the same industry are cheaper than AJG, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 37.57 | ||
| EV/EBITDA | 18.52 |
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)3.46
PEG (5Y)1.09
EPS Next 2Y15.43%
EPS Next 3Y14.68%
5. Dividend
5.1 Amount
- AJG has a Yearly Dividend Yield of 1.02%. Purely for dividend investing, there may be better candidates out there.
- AJG's Dividend Yield is comparable with the industry average which is at 2.53.
- With a Dividend Yield of 1.02, AJG pays less dividend than the S&P500 average, which is at 1.84.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.02% |
5.2 History
- The dividend of AJG has a limited annual growth rate of 5.46%.
- AJG has been paying a dividend for at least 10 years, so it has 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
- 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%
258.52
+2.37 (+0.93%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)10-30 2025-10-30/amc
Earnings (Next)01-29 2026-01-29/amc
Inst Owners91.72%
Inst Owner Change0.01%
Ins Owners0.59%
Ins Owner Change0.31%
Market Cap66.39B
Revenue(TTM)13.03B
Net Income(TTM)1.60B
Analysts75.56
Price Target305.69 (18.25%)
Short Float %1.53%
Short Ratio2.21
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.02% |
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)-2.77%
Min Revenue beat(2)-4.64%
Max Revenue beat(2)-0.9%
Revenue beat(4)0
Avg Revenue beat(4)-2.14%
Min Revenue beat(4)-4.64%
Max Revenue beat(4)-0.9%
Revenue beat(8)0
Avg Revenue beat(8)-1.92%
Revenue beat(12)2
Avg Revenue beat(12)-0.9%
Revenue beat(16)5
Avg Revenue beat(16)-0.09%
PT rev (1m)-3.44%
PT rev (3m)-12.25%
EPS NQ rev (1m)-4.45%
EPS NQ rev (3m)-8.7%
EPS NY rev (1m)-0.46%
EPS NY rev (3m)-3.42%
Revenue NQ rev (1m)-0.43%
Revenue NQ rev (3m)-2.42%
Revenue NY rev (1m)-0.15%
Revenue NY rev (3m)-1.02%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.74 | ||
| Fwd PE | 19.14 | ||
| P/S | 5.1 | ||
| P/FCF | 37.57 | ||
| P/OCF | 34.65 | ||
| P/B | 2.86 | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.52 |
EPS(TTM)10.45
EY4.04%
EPS(NY)13.51
Fwd EY5.23%
FCF(TTM)6.88
FCFY2.66%
OCF(TTM)7.46
OCFY2.89%
SpS50.74
BVpS90.36
TBVpS-38.01
PEG (NY)3.46
PEG (5Y)1.09
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 | 1.15 |
F-Score4
WACC8.02%
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 Year21.22%
Revenue Next 2Y21.91%
Revenue Next 3Y17.75%
Revenue Next 5Y13.9%
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 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.
Can you provide the dividend sustainability for AJG stock?
The dividend rating of ARTHUR J GALLAGHER & CO (AJG) is 6 / 10 and the dividend payout ratio is 39.43%.