ARTHUR J GALLAGHER & CO (AJG)
US3635761097 - Common Stock
Taking everything into account, AJG scores 5 out of 10 in our fundamental rating. AJG was compared to 140 industry peers in the Insurance industry. AJG has an excellent profitability rating, but there are 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.
In the past year AJG had a positive cash flow from operations.
In the past 5 years AJG has always been profitable.
In the past 5 years AJG always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 1.88%, AJG is in line with its industry, outperforming 54.68% of the companies in the same industry.
AJG has a Return On Equity (9.00%) which is comparable to the rest of the industry.
AJG has a better Return On Invested Capital (6.95%) than 89.93% of its industry peers.
AJG had an Average Return On Invested Capital over the past 3 years of 7.65%. This is above the industry average of 4.09%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.88% | ||
| ROE | 9% | ||
| ROIC | 6.95% |
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's Profit Margin of 9.63% is fine compared to the rest of the industry. AJG outperforms 63.31% of its industry peers.
In the last couple of years the Profit Margin of AJG has remained more or less at the same level.
AJG's Operating Margin of 17.38% is fine compared to the rest of the industry. AJG outperforms 73.38% of its industry peers.
AJG's Operating Margin has improved in the last couple of years.
The Gross Margin of AJG (44.85%) is better than 94.24% of its industry peers.
AJG's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.38% | ||
| PM (TTM) | 9.63% | ||
| GM | 44.85% |
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.
The number of shares outstanding for AJG has been increased compared to 1 year ago.
Compared to 5 years ago, AJG has more shares outstanding
The debt/assets ratio for AJG has been reduced compared to a year ago.
2.2 Solvency
AJG has an Altman-Z score of 1.19. 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 1.19, AJG belongs to the best of the industry, outperforming 85.61% of the companies in the same industry.
AJG has a debt to FCF ratio of 4.33. This is a neutral value as AJG would need 4.33 years to pay back of all of its debts.
The Debt to FCF ratio of AJG (4.33) is worse than 64.03% of its industry peers.
AJG has a Debt/Equity ratio of 0.68. This is a neutral value indicating AJG is somewhat dependend on debt financing.
AJG has a worse Debt to Equity ratio (0.68) than 76.26% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.68 | ||
| Debt/FCF | 4.33 | ||
| Altman-Z | 1.19 |
ROIC/WACC0.82
WACC8.5%
2.3 Liquidity
AJG has a Current Ratio of 1.03. This is a normal value and indicates that AJG is financially healthy and should not expect problems in meeting its short term obligations.
AJG's Current ratio of 1.03 is fine compared to the rest of the industry. AJG outperforms 79.86% of its industry peers.
AJG has a Quick Ratio of 1.03. 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 better Quick ratio (1.03) than 79.86% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.03 | ||
| Quick Ratio | 1.03 |
3. Growth
3.1 Past
AJG shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 16.60%, which is quite good.
Measured over the past years, AJG shows a very strong growth in Earnings Per Share. The EPS has been growing by 20.54% on average per year.
AJG shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 17.79%.
Measured over the past years, AJG shows a small growth in Revenue. The Revenue has been growing by 7.75% on average per year.
EPS 1Y (TTM)16.6%
EPS 3Y22.9%
EPS 5Y20.54%
EPS growth Q2Q42.31%
Revenue 1Y (TTM)17.79%
Revenue growth 3Y12.87%
Revenue growth 5Y7.75%
Revenue growth Q2Q19.9%
3.2 Future
The Earnings Per Share is expected to grow by 13.97% on average over the next years. This is quite good.
The Revenue is expected to grow by 12.29% on average over the next years. This is quite good.
EPS Next Y16.7%
EPS Next 2Y14.2%
EPS Next 3Y13.97%
EPS Next 5YN/A
Revenue Next Year15.58%
Revenue Next 2Y12.75%
Revenue Next 3Y12.29%
Revenue Next 5YN/A
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 26.65, AJG can be considered very expensive at the moment.
65.47% 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 (24.80), we can say AJG is valued inline with the index average.
Based on the Price/Forward Earnings ratio of 22.84, the valuation of AJG can be described as rather expensive.
AJG's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. AJG is more expensive than 69.06% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of AJG to the average of the S&P500 Index (21.27), we can say AJG is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.65 | ||
| Fwd PE | 22.84 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as AJG.
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 66.91% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.79 | ||
| EV/EBITDA | 23.62 |
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 decent profitability rating of AJG may justify a higher PE ratio.
AJG's earnings are expected to grow with 13.97% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.6
PEG (5Y)1.3
EPS Next 2Y14.2%
EPS Next 3Y13.97%
5. Dividend
5.1 Amount
AJG has a Yearly Dividend Yield of 1.01%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 4.31, AJG has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.40, AJG's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.01% |
5.2 History
The dividend of AJG has a limited annual growth rate of 5.97%.
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)5.97%
Div Incr Years13
Div Non Decr Years19
5.3 Sustainability
AJG pays out 48.85% of its income as dividend. 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.
DP48.85%
EPS Next 2Y14.2%
EPS Next 3Y13.97%
ARTHUR J GALLAGHER & CO
NYSE:AJG (4/18/2024, 7:04:00 PM)
Premarket: 233.99 0 (0%)233.99
+3.47 (+1.51%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap51.08B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.01% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
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EPS beat(4)
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EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
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Revenue beat(4)
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Revenue beat(8)
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Revenue beat(12)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.65 | ||
| Fwd PE | 22.84 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)1.6
PEG (5Y)1.3
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.88% | ||
| ROE | 9% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 17.38% | ||
| PM (TTM) | 9.63% | ||
| GM | 44.85% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.2
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.68 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.03 | ||
| Quick Ratio | 1.03 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)16.6%
EPS 3Y22.9%
EPS 5Y
EPS growth Q2Q
EPS Next Y16.7%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)17.79%
Revenue growth 3Y12.87%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y