ARTHUR J GALLAGHER & CO (AJG) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:AJG - US3635761097 - Common Stock
264.84 USD
+0.25 (+0.09%)
264 USD
-0.84 (-0.32%)
AJG gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 146 industry peers in the Insurance industry. AJG has an excellent profitability rating, but there are concerns on its financial health. AJG is valued quite expensive, but it does show an excellent growth.
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.
Each year in the past 5 years AJG has been profitable.
AJG had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of AJG (2.03%) is comparable to the rest of the industry.
AJG has a worse Return On Equity (6.90%) than 70.55% of its industry peers.
AJG has a better Return On Invested Capital (6.70%) than 86.99% of its industry peers.
The Average Return On Invested Capital over the past 3 years for AJG 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
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.
AJG has a Operating Margin of 24.80%. This is amongst the best in 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 Gross Margin of 46.39%. This is amongst the best in the industry. AJG outperforms 94.52% of its industry peers.
In the last couple of years the Gross Margin of AJG has grown nicely.
| 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.
AJG has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, AJG has more shares outstanding
The debt/assets ratio for AJG is higher compared to a year ago.
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.
Looking at the Altman-Z score, with a value of 1.17, AJG belongs to the top of the industry, outperforming 81.51% of the companies in the same industry.
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.
Looking at the Debt to FCF ratio, with a value of 7.42, AJG is doing worse than 68.49% 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.
Looking at the Debt to Equity ratio, with a value of 0.53, AJG is doing worse than 75.34% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.53 | ||
| Debt/FCF | 7.42 | ||
| Altman-Z | 1.17 |
ROIC/WACC0.84
WACC7.99%
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.
With a decent Current ratio value of 1.06, AJG is doing good in 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.
AJG has a better Quick ratio (1.06) than 79.45% 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.
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.
The Revenue is expected to grow by 13.92% on average over the next years. This is quite good.
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
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
Based on the Price/Earnings ratio of 25.34, the valuation of AJG can be described as expensive.
73.97% of the companies in the same industry are cheaper than AJG, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 27.25. AJG is around the same levels.
With a Price/Forward Earnings ratio of 19.60, AJG is valued on the expensive side.
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 23.98. AJG is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.34 | ||
| Fwd PE | 19.6 |
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 67.12% of the companies 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 72.60% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 38.48 | ||
| EV/EBITDA | 18.89 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of AJG may justify a higher PE ratio.
A more expensive valuation may be justified as AJG's earnings are expected to grow with 14.68% in the coming years.
PEG (NY)3.54
PEG (5Y)1.12
EPS Next 2Y15.43%
EPS Next 3Y14.68%
5. Dividend
5.1 Amount
With a yearly dividend of 0.98%, AJG is not a good candidate for dividend investing.
AJG's Dividend Yield is comparable with the industry average which is at 2.42.
Compared to an average S&P500 Dividend Yield of 1.92, AJG's dividend is way lower than the S&P500 average.
| 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.
The dividend of AJG is growing, but earnings are growing more, so the dividend growth is sustainable.
DP39.43%
EPS Next 2Y15.43%
EPS Next 3Y14.68%
264.84
+0.25 (+0.09%)
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 Cap68.01B
Revenue(TTM)13.03B
Net Income(TTM)1.60B
Analysts75.56
Price Target307.26 (16.02%)
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 | 25.34 | ||
| Fwd PE | 19.6 | ||
| P/S | 5.22 | ||
| P/FCF | 38.48 | ||
| P/OCF | 35.49 | ||
| P/B | 2.93 | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.89 |
EPS(TTM)10.45
EY3.95%
EPS(NY)13.51
Fwd EY5.1%
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%.