ARTHUR J GALLAGHER & CO (AJG) Stock Fundamental Analysis
USA - NYSE:AJG - US3635761097 - Common Stock
255 USD
+3.94 (+1.57%)
255 USD
0 (0%)
Overall AJG gets a fundamental rating of 5 out of 10. We evaluated AJG against 146 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 expensive, but it does show an excellent growth.
1. Profitability
1.1 Basic Checks
In the past year AJG was profitable.
AJG had a positive operating cash flow in the past year.
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
The Return On Assets of AJG (2.05%) is comparable to the rest of the industry.
AJG has a Return On Equity of 7.13%. This is in the lower half of the industry: AJG underperforms 69.18% of its industry peers.
AJG has a Return On Invested Capital of 6.72%. This is amongst the best in the industry. AJG outperforms 87.67% of its industry peers.
The Average Return On Invested Capital over the past 3 years for AJG is above the industry average of 4.51%.
| 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
With a decent Profit Margin value of 13.16%, AJG is doing good in the industry, outperforming 75.34% of the companies in the same industry.
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 89.73% of its industry peers.
In the last couple of years the Operating Margin of AJG has grown nicely.
AJG's Gross Margin of 46.51% is amongst the best of the industry. AJG outperforms 93.84% of its industry peers.
In the last couple of years the Gross Margin of AJG has grown nicely.
| 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.
Compared to 1 year ago, AJG has a worse debt to assets ratio.
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.
AJG's Altman-Z score of 1.29 is amongst the best of the industry. AJG outperforms 80.82% of its industry peers.
AJG has a debt to FCF ratio of 6.54. This is a slightly negative value and a sign of low solvency as AJG would need 6.54 years to pay back of all of its debts.
The Debt to FCF ratio of AJG (6.54) is worse than 65.07% 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 70.55% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.53 | ||
| Debt/FCF | 6.54 | ||
| Altman-Z | 1.29 |
ROIC/WACC0.85
WACC7.92%
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 84.93% 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.
AJG has a Quick ratio of 1.36. This is amongst the best in the industry. AJG outperforms 84.93% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.36 | ||
| Quick Ratio | 1.36 |
3. Growth
3.1 Past
AJG shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 5.98%.
The Earnings Per Share has been growing by 22.61% on average over the past years. This is a very strong growth
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
AJG is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 16.30% yearly.
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
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of 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
Based on the Price/Earnings ratio of 24.40, the valuation of AJG can be described as rather expensive.
76.03% of the companies in the same industry are cheaper than AJG, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of AJG to the average of the S&P500 Index (26.35), we can say AJG is valued inline with the index average.
AJG is valuated rather expensively with a Price/Forward Earnings ratio of 18.66.
67.81% 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 (33.72), we can say AJG is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.4 | ||
| Fwd PE | 18.66 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, AJG is valued a bit more expensive than 60.27% 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 68.49% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 33.15 | ||
| EV/EBITDA | 15.39 |
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.
AJG's earnings are expected to grow with 14.75% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.71
PEG (5Y)1.08
EPS Next 2Y16.08%
EPS Next 3Y14.75%
5. Dividend
5.1 Amount
AJG has a Yearly Dividend Yield of 1.06%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.45, AJG has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.36, AJG's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.06% |
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
36.32% 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.
DP36.32%
EPS Next 2Y16.08%
EPS Next 3Y14.75%
255
+3.94 (+1.57%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners90.89%
Inst Owner Change0.57%
Ins Owners0.6%
Ins Owner Change1.26%
Market Cap65.37B
Revenue(TTM)13.03B
Net Income(TTM)1.64B
Analysts75.83
Price Target347.85 (36.41%)
Short Float %1.5%
Short Ratio2.81
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.06% |
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)-0.15%
PT rev (3m)0.84%
EPS NQ rev (1m)0.54%
EPS NQ rev (3m)4.67%
EPS NY rev (1m)-1.76%
EPS NY rev (3m)-0.87%
Revenue NQ rev (1m)1.96%
Revenue NQ rev (3m)5.83%
Revenue NY rev (1m)-0.38%
Revenue NY rev (3m)0.44%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.4 | ||
| Fwd PE | 18.66 | ||
| P/S | 5.24 | ||
| P/FCF | 33.15 | ||
| P/OCF | 30.84 | ||
| P/B | 2.84 | ||
| P/tB | 15.75 | ||
| EV/EBITDA | 15.39 |
EPS(TTM)10.45
EY4.1%
EPS(NY)13.66
Fwd EY5.36%
FCF(TTM)7.69
FCFY3.02%
OCF(TTM)8.27
OCFY3.24%
SpS48.65
BVpS89.81
TBVpS16.19
PEG (NY)2.71
PEG (5Y)1.08
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
WACC7.92%
ROIC/WACC0.85
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.