ARTHUR J GALLAGHER & CO (AJG) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:AJG - US3635761097 - Common Stock
253.39 USD
+0.75 (+0.3%)
253.39 USD
0 (0%)
Taking everything into account, AJG scores 5 out of 10 in our fundamental rating. AJG was compared to 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 is valued quite expensively, but it does show have an excellent growth rating.
1. Profitability
1.1 Basic Checks
In the past year AJG was profitable.
In the past year AJG had a positive cash flow from operations.
In the past 5 years AJG has always been profitable.
AJG had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
AJG has a Return On Assets (2.03%) which is comparable to the rest of the industry.
With a Return On Equity value of 6.90%, AJG is not doing good in the industry: 70.27% of the companies in the same industry are doing better.
AJG has a better Return On Invested Capital (6.70%) than 86.49% of its industry peers.
The Average Return On Invested Capital over the past 3 years for AJG is significantly below the industry average of 14.89%.
| 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 better Profit Margin (12.29%) than 66.22% of its industry peers.
AJG's Profit Margin has improved in the last couple of years.
The Operating Margin of AJG (24.80%) is better than 83.78% of its industry peers.
AJG's Operating Margin has improved in the last couple of years.
AJG has a Gross Margin of 46.39%. This is amongst the best in the industry. AJG outperforms 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
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 1.14, we must say that AJG is in the distress zone and has some risk of bankruptcy.
AJG has a better Altman-Z score (1.14) than 80.41% 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 has a Debt to FCF ratio of 7.42. This is in the lower half of the industry: AJG underperforms 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 | 1.14 |
ROIC/WACC0.84
WACC7.94%
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.
AJG has a Current ratio of 1.06. This is in the better half of the industry: AJG outperforms 79.05% of its industry peers.
A Quick Ratio of 1.06 indicates that AJG should not have too much problems paying its short term obligations.
AJG has a better Quick ratio (1.06) than 79.05% 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.
AJG shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 22.61% yearly.
Looking at the last year, AJG shows a quite strong growth in Revenue. The Revenue has grown by 15.61% in the last year.
Measured over the past years, AJG shows a quite strong growth in Revenue. The Revenue has been growing by 9.94% on average per year.
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.
Based on estimates for the next years, AJG will show a quite strong growth in Revenue. The Revenue will grow by 13.92% on average per year.
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
With a Price/Earnings ratio of 24.25, AJG is valued on the expensive side.
73.65% of the companies in the same industry are cheaper than AJG, based on the Price/Earnings ratio.
AJG is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 26.38, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 18.73, which indicates a rather expensive current valuation of AJG.
68.24% of the companies in the same industry are cheaper than AJG, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of AJG to the average of the S&P500 Index (23.83), we can say AJG is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.25 | ||
| Fwd PE | 18.73 |
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 65.54% 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 | 36.82 | ||
| EV/EBITDA | 18.2 |
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)3.17
PEG (5Y)1.07
EPS Next 2Y15.51%
EPS Next 3Y14.84%
5. Dividend
5.1 Amount
AJG has a Yearly Dividend Yield of 1.03%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 2.33, AJG has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 1.87, AJG's dividend is way lower than the S&P500 average.
| 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 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 2Y15.51%
EPS Next 3Y14.84%
253.39
+0.75 (+0.3%)
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 Cap65.07B
Revenue(TTM)13.03B
Net Income(TTM)1.60B
Analysts76
Price Target316.59 (24.94%)
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 | 24.25 | ||
| Fwd PE | 18.73 | ||
| P/S | 4.99 | ||
| P/FCF | 36.82 | ||
| P/OCF | 33.96 | ||
| P/B | 2.8 | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.2 |
EPS(TTM)10.45
EY4.12%
EPS(NY)13.53
Fwd EY5.34%
FCF(TTM)6.88
FCFY2.72%
OCF(TTM)7.46
OCFY2.94%
SpS50.74
BVpS90.36
TBVpS-38.01
PEG (NY)3.17
PEG (5Y)1.07
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 | 1.14 |
F-Score4
WACC7.94%
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 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 7.64% in the next year.