ARTHUR J GALLAGHER & CO (AJG) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:AJG - US3635761097 - Common Stock
251.41 USD
+4.11 (+1.66%)
251.41 USD
0 (0%)
Overall AJG gets a fundamental rating of 5 out of 10. We evaluated AJG against 147 industry peers in the Insurance industry. While AJG has a great profitability rating, there are quite some 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.
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
AJG has a Return On Assets of 2.05%. This is comparable to the rest of the industry: AJG outperforms 51.70% of its industry peers.
The Return On Equity of AJG (7.13%) is worse than 70.07% of its industry peers.
AJG has a better Return On Invested Capital (6.72%) than 87.76% of its industry peers.
The Average Return On Invested Capital over the past 3 years for AJG is above the industry average of 4.37%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.05% | ||
| ROE | 7.13% | ||
| ROIC | 6.72% |
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 13.16%. This is in the better half of the industry: AJG outperforms 70.07% of its industry peers.
AJG's Profit Margin has improved in the last couple of years.
AJG has a Operating Margin of 25.44%. This is amongst the best in the industry. AJG outperforms 89.12% of its industry peers.
AJG's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 46.51%, AJG belongs to the top of the industry, outperforming 93.88% of the companies in the same industry.
AJG's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 25.44% | ||
| PM (TTM) | 13.16% | ||
| GM | 46.51% |
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.
The number of shares outstanding for AJG has been increased compared to 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 1.29. This is a bad value and indicates that AJG is not financially healthy and even has some risk of bankruptcy.
With an excellent Altman-Z score value of 1.29, AJG belongs to the best of the industry, outperforming 80.27% of the companies in the same industry.
The Debt to FCF ratio of AJG is 6.54, which is on the high side as it means it would take AJG, 6.54 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 6.54, AJG is doing worse than 68.03% of the companies in the same industry.
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 worse Debt to Equity ratio (0.53) than 75.51% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.53 | ||
| Debt/FCF | 6.54 | ||
| Altman-Z | 1.29 |
ROIC/WACC0.86
WACC7.84%
2.3 Liquidity
AJG has a Current Ratio of 1.36. 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 1.36, AJG belongs to the top of the industry, outperforming 85.03% of the companies in the same industry.
A Quick Ratio of 1.36 indicates that AJG should not have too much problems paying its short term obligations.
With an excellent Quick ratio value of 1.36, AJG belongs to the best of the industry, outperforming 85.03% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.36 | ||
| Quick Ratio | 1.36 |
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.
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
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.
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 Y8.99%
EPS Next 2Y16.08%
EPS Next 3Y14.75%
EPS Next 5Y16.3%
Revenue Next Year22.11%
Revenue Next 2Y22.43%
Revenue Next 3Y17.77%
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.
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 24.06 indicates a rather expensive valuation of AJG.
AJG's Price/Earnings ratio is a bit more expensive when compared to the industry. AJG is more expensive than 77.55% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 25.45, AJG is valued at the same level.
With a Price/Forward Earnings ratio of 18.40, AJG is valued on the expensive side.
Based on the Price/Forward Earnings ratio, AJG is valued a bit more expensive than 72.11% of the companies in the same industry.
AJG is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 34.46, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.06 | ||
| Fwd PE | 18.4 |
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 63.27% of the companies listed in the same industry.
AJG's Price/Free Cash Flow ratio is a bit more expensive when compared to the industry. AJG is more expensive than 71.43% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 32.69 | ||
| EV/EBITDA | 15.42 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
AJG has a very decent profitability rating, which may justify a higher PE ratio.
AJG's earnings are expected to grow with 14.75% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.68
PEG (5Y)1.06
EPS Next 2Y16.08%
EPS Next 3Y14.75%
5. Dividend
5.1 Amount
AJG has a Yearly Dividend Yield of 1.05%.
Compared to an average industry Dividend Yield of 3.43, AJG has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.42, AJG's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.05% |
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 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
AJG pays out 36.32% of its income as dividend. This is a sustainable payout ratio.
The dividend of AJG is growing, but earnings are growing more, so the dividend growth is sustainable.
DP36.32%
EPS Next 2Y16.08%
EPS Next 3Y14.75%
251.41
+4.11 (+1.66%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners90.89%
Inst Owner Change0.93%
Ins Owners0.6%
Ins Owner Change0.81%
Market Cap64.45B
Revenue(TTM)13.03B
Net Income(TTM)1.64B
Analysts75.83
Price Target325.35 (29.41%)
Short Float %1.49%
Short Ratio2.33
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.05% |
Yearly Dividend2.25
Dividend Growth(5Y)5.46%
DP36.32%
Div Incr Years14
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.57%
Min EPS beat(2)-2.57%
Max EPS beat(2)1.43%
EPS beat(4)2
Avg EPS beat(4)0.27%
Min EPS beat(4)-2.57%
Max EPS beat(4)3.69%
EPS beat(8)4
Avg EPS beat(8)0.38%
EPS beat(12)7
Avg EPS beat(12)-0.62%
EPS beat(16)11
Avg EPS beat(16)0.38%
Revenue beat(2)0
Avg Revenue beat(2)-0.86%
Min Revenue beat(2)-0.9%
Max Revenue beat(2)-0.81%
Revenue beat(4)0
Avg Revenue beat(4)-1.44%
Min Revenue beat(4)-2.19%
Max Revenue beat(4)-0.81%
Revenue beat(8)0
Avg Revenue beat(8)-1.32%
Revenue beat(12)2
Avg Revenue beat(12)-0.52%
Revenue beat(16)6
Avg Revenue beat(16)1.13%
PT rev (1m)-6.61%
PT rev (3m)-5.52%
EPS NQ rev (1m)0%
EPS NQ rev (3m)4.3%
EPS NY rev (1m)-1.68%
EPS NY rev (3m)-0.94%
Revenue NQ rev (1m)-0.03%
Revenue NQ rev (3m)4.65%
Revenue NY rev (1m)-0.57%
Revenue NY rev (3m)0.43%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.06 | ||
| Fwd PE | 18.4 | ||
| P/S | 5.17 | ||
| P/FCF | 32.69 | ||
| P/OCF | 30.4 | ||
| P/B | 2.8 | ||
| P/tB | 15.53 | ||
| EV/EBITDA | 15.42 |
EPS(TTM)10.45
EY4.16%
EPS(NY)13.66
Fwd EY5.43%
FCF(TTM)7.69
FCFY3.06%
OCF(TTM)8.27
OCFY3.29%
SpS48.65
BVpS89.81
TBVpS16.19
PEG (NY)2.68
PEG (5Y)1.06
Graham Number145.31
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.05% | ||
| ROE | 7.13% | ||
| ROCE | 8.44% | ||
| ROIC | 6.72% | ||
| ROICexc | 10.82% | ||
| ROICexgc | 55.53% | ||
| OM | 25.44% | ||
| PM (TTM) | 13.16% | ||
| GM | 46.51% | ||
| FCFM | 15.81% |
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-Score6
Asset Turnover0.16
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.53 | ||
| Debt/FCF | 6.54 | ||
| Debt/EBITDA | 3 | ||
| Cap/Depr | 16.31% | ||
| Cap/Sales | 1.19% | ||
| Interest Coverage | 7.87 | ||
| Cash Conversion | 51.96% | ||
| Profit Quality | 120.15% | ||
| Current Ratio | 1.36 | ||
| Quick Ratio | 1.36 | ||
| Altman-Z | 1.29 |
F-Score6
WACC7.84%
ROIC/WACC0.86
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 Y8.99%
EPS Next 2Y16.08%
EPS Next 3Y14.75%
EPS Next 5Y16.3%
Revenue 1Y (TTM)15.61%
Revenue growth 3Y12.07%
Revenue growth 5Y9.94%
Sales Q2Q%21.48%
Revenue Next Year22.11%
Revenue Next 2Y22.43%
Revenue Next 3Y17.77%
Revenue Next 5Y13.92%
EBIT growth 1Y51.53%
EBIT growth 3Y27.14%
EBIT growth 5Y27.83%
EBIT Next Year67.25%
EBIT Next 3Y31.74%
EBIT Next 5Y20.35%
FCF growth 1Y21.9%
FCF growth 3Y15.71%
FCF growth 5Y20.01%
OCF growth 1Y17.9%
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 8.99% in the next year.