ARTHUR J GALLAGHER & CO (AJG)
US3635761097 - Common Stock
Overall AJG gets a fundamental rating of 5 out of 10. We evaluated AJG against 141 industry peers in the Insurance industry. While AJG belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. While showing a medium growth rate, AJG is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
In the past year AJG was profitable.
AJG had a positive operating cash flow in the past year.
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
With a Return On Assets value of 2.05%, AJG perfoms like the industry average, outperforming 47.86% of the companies in the same industry.
AJG has a Return On Equity of 9.62%. This is comparable to the rest of the industry: AJG outperforms 44.29% of its industry peers.
Looking at the Return On Invested Capital, with a value of 8.17%, AJG belongs to the top of the industry, outperforming 90.71% of the companies in the same industry.
AJG had an Average Return On Invested Capital over the past 3 years of 7.65%. This is above the industry average of 4.38%.
The last Return On Invested Capital (8.17%) for AJG is above the 3 year average (7.65%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.05% | ||
| ROE | 9.62% | ||
| ROIC | 8.17% |
ROA(3y)2.5%
ROA(5y)2.92%
ROE(3y)10.61%
ROE(5y)11.61%
ROIC(3y)7.65%
ROIC(5y)7.37%
1.3 Margins
AJG has a better Profit Margin (10.40%) than 62.14% of its industry peers.
In the last couple of years the Profit Margin of AJG has remained more or less at the same level.
Looking at the Operating Margin, with a value of 19.52%, AJG is in the better half of the industry, outperforming 77.86% of the companies in the same industry.
AJG's Operating Margin has improved in the last couple of years.
AJG's Gross Margin of 45.10% is amongst the best of the industry. AJG outperforms 95.00% of its industry peers.
In the last couple of years the Gross Margin of AJG has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.52% | ||
| PM (TTM) | 10.4% | ||
| GM | 45.1% |
OM growth 3Y2.39%
OM growth 5Y14.92%
PM growth 3Y-6.27%
PM growth 5Y1.05%
GM growth 3Y6.87%
GM growth 5Y9.78%
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.
AJG has a better debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.30, we must say that AJG is in the distress zone and has some risk of bankruptcy.
AJG has a better Altman-Z score (1.30) than 83.57% of its industry peers.
AJG has a debt to FCF ratio of 3.45. This is a good value and a sign of high solvency as AJG would need 3.45 years to pay back of all of its debts.
With a Debt to FCF ratio value of 3.45, AJG is not doing good in the industry: 61.43% of the companies in the same industry are doing better.
A Debt/Equity ratio of 0.66 indicates that AJG is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.66, AJG is not doing good in the industry: 81.43% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.66 | ||
| Debt/FCF | 3.45 | ||
| Altman-Z | 1.3 |
ROIC/WACC0.95
WACC8.6%
2.3 Liquidity
A Current Ratio of 1.06 indicates that AJG should not have too much problems paying its short term obligations.
AJG's Current ratio of 1.06 is fine compared to the rest of the industry. AJG outperforms 79.29% of its industry peers.
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.
Looking at the Quick ratio, with a value of 1.06, AJG is in the better half of the industry, outperforming 79.29% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.06 | ||
| Quick Ratio | 1.06 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 19.81% over the past year.
AJG shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 20.54% yearly.
Looking at the last year, AJG shows a quite strong growth in Revenue. The Revenue has grown by 16.57% in the last year.
AJG shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.75% yearly.
EPS 1Y (TTM)19.81%
EPS 3Y22.9%
EPS 5Y20.54%
EPS Q2Q%13%
Revenue 1Y (TTM)16.57%
Revenue growth 3Y12.87%
Revenue growth 5Y7.75%
Sales Q2Q%11.86%
3.2 Future
AJG is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 14.82% yearly.
Based on estimates for the next years, AJG will show a quite strong growth in Revenue. The Revenue will grow by 11.10% on average per year.
EPS Next Y16.24%
EPS Next 2Y14%
EPS Next 3Y13.18%
EPS Next 5Y14.82%
Revenue Next Year14.63%
Revenue Next 2Y12.36%
Revenue Next 3Y11.65%
Revenue Next 5Y11.1%
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
The Price/Earnings ratio is 28.71, which means the current valuation is very expensive for AJG.
Compared to the rest of the industry, the Price/Earnings ratio of AJG indicates a slightly more expensive valuation: AJG is more expensive than 75.71% of the companies listed in the same industry.
AJG is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.73, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 24.81, AJG is valued on the expensive side.
72.86% of the companies in the same industry are cheaper than AJG, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.83, AJG is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.71 | ||
| Fwd PE | 24.81 |
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 61.43% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, AJG is valued a bit more expensive than 65.71% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.96 | ||
| EV/EBITDA | 22.26 |
4.3 Compensation for Growth
AJG's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of AJG may justify a higher PE ratio.
AJG's earnings are expected to grow with 13.18% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.77
PEG (5Y)1.4
EPS Next 2Y14%
EPS Next 3Y13.18%
5. Dividend
5.1 Amount
With a yearly dividend of 0.86%, AJG is not a good candidate for dividend investing.
AJG's Dividend Yield is slightly below the industry average, which is at 4.33.
With a Dividend Yield of 0.86, AJG pays less dividend than the S&P500 average, which is at 2.34.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.86% |
5.2 History
The dividend of AJG has a limited annual growth rate of 5.97%.
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)5.97%
Div Incr Years14
Div Non Decr Years34
5.3 Sustainability
43.74% of the earnings are spent on dividend by AJG. This is a bit on the high side, but may be sustainable.
The dividend of AJG is growing, but earnings are growing more, so the dividend growth is sustainable.
DP43.74%
EPS Next 2Y14%
EPS Next 3Y13.18%
ARTHUR J GALLAGHER & CO
NYSE:AJG (12/20/2024, 8:04:00 PM)
After market: 283.1 0 (0%)283.1
+4.01 (+1.44%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners88.61%
Inst Owner Change0.44%
Ins Owners0.73%
Ins Owner Change1.41%
Market Cap70.72B
Analysts72.5
Price Target302.01 (6.68%)
Short Float %1.32%
Short Ratio1.91
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.86% |
Dividend Growth(5Y)5.97%
DP43.74%
Div Incr Years14
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-0.78%
Min EPS beat(2)-1.48%
Max EPS beat(2)-0.08%
EPS beat(4)1
Avg EPS beat(4)-0.28%
Min EPS beat(4)-1.48%
Max EPS beat(4)1.34%
EPS beat(8)4
Avg EPS beat(8)-1.53%
EPS beat(12)8
Avg EPS beat(12)-0.42%
EPS beat(16)12
Avg EPS beat(16)1.57%
Revenue beat(2)0
Avg Revenue beat(2)-2.1%
Min Revenue beat(2)-2.19%
Max Revenue beat(2)-2.02%
Revenue beat(4)0
Avg Revenue beat(4)-1.7%
Min Revenue beat(4)-2.19%
Max Revenue beat(4)-0.67%
Revenue beat(8)2
Avg Revenue beat(8)-0.28%
Revenue beat(12)5
Avg Revenue beat(12)0.59%
Revenue beat(16)9
Avg Revenue beat(16)5.32%
PT rev (1m)0.88%
PT rev (3m)3.9%
EPS NQ rev (1m)-0.06%
EPS NQ rev (3m)-0.08%
EPS NY rev (1m)0.01%
EPS NY rev (3m)-0.74%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.22%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.43%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.71 | ||
| Fwd PE | 24.81 | ||
| P/S | 5.51 | ||
| P/FCF | 25.96 | ||
| P/OCF | 24.48 | ||
| P/B | 5.1 | ||
| P/tB | N/A | ||
| EV/EBITDA | 22.26 |
EPS(TTM)9.86
EY3.48%
EPS(NY)11.41
Fwd EY4.03%
FCF(TTM)10.91
FCFY3.85%
OCF(TTM)11.56
OCFY4.08%
SpS51.37
BVpS55.53
TBVpS-19.88
PEG (NY)1.77
PEG (5Y)1.4
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.05% | ||
| ROE | 9.62% | ||
| ROCE | 9.98% | ||
| ROIC | 8.17% | ||
| ROICexc | 8.98% | ||
| ROICexgc | 48.78% | ||
| OM | 19.52% | ||
| PM (TTM) | 10.4% | ||
| GM | 45.1% | ||
| FCFM | 21.23% |
ROA(3y)2.5%
ROA(5y)2.92%
ROE(3y)10.61%
ROE(5y)11.61%
ROIC(3y)7.65%
ROIC(5y)7.37%
ROICexc(3y)7.95%
ROICexc(5y)7.71%
ROICexgc(3y)37.35%
ROICexgc(5y)34.13%
ROCE(3y)9.36%
ROCE(5y)9.03%
ROICexcg growth 3Y9.62%
ROICexcg growth 5Y6.72%
ROICexc growth 3Y-3.03%
ROICexc growth 5Y3.71%
OM growth 3Y2.39%
OM growth 5Y14.92%
PM growth 3Y-6.27%
PM growth 5Y1.05%
GM growth 3Y6.87%
GM growth 5Y9.78%
F-Score6
Asset Turnover0.2
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.66 | ||
| Debt/FCF | 3.45 | ||
| Debt/EBITDA | 2.67 | ||
| Cap/Depr | 17.62% | ||
| Cap/Sales | 1.28% | ||
| Interest Coverage | 6.31 | ||
| Cash Conversion | 84.05% | ||
| Profit Quality | 204.14% | ||
| Current Ratio | 1.06 | ||
| Quick Ratio | 1.06 | ||
| Altman-Z | 1.3 |
F-Score6
WACC8.6%
ROIC/WACC0.95
Cap/Depr(3y)26.99%
Cap/Depr(5y)25.58%
Cap/Sales(3y)1.88%
Cap/Sales(5y)1.79%
Profit Quality(3y)179.23%
Profit Quality(5y)178.57%
High Growth Momentum
Growth
EPS 1Y (TTM)19.81%
EPS 3Y22.9%
EPS 5Y20.54%
EPS Q2Q%13%
EPS Next Y16.24%
EPS Next 2Y14%
EPS Next 3Y13.18%
EPS Next 5Y14.82%
Revenue 1Y (TTM)16.57%
Revenue growth 3Y12.87%
Revenue growth 5Y7.75%
Sales Q2Q%11.86%
Revenue Next Year14.63%
Revenue Next 2Y12.36%
Revenue Next 3Y11.65%
Revenue Next 5Y11.1%
EBIT growth 1Y7.75%
EBIT growth 3Y15.57%
EBIT growth 5Y23.83%
EBIT Next Year30.05%
EBIT Next 3Y18.26%
EBIT Next 5Y17.55%
FCF growth 1Y6.2%
FCF growth 3Y2.48%
FCF growth 5Y23.46%
OCF growth 1Y4.89%
OCF growth 3Y3.98%
OCF growth 5Y21.57%